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2015-1637
WHEREAS, the Facilities are located within the territorial limits of the County of San Diego (the "County") and the Board of Supervisors of the County (the "Board'') is the elected legislative body of the County; and
WHEREAS, the Authority and the Borrower have requested that the Board approve the issuance of the Obligations and the financing and refinancing of the Facilities with the proceeds of the Obligations solely for purposes of complying with Section 147(f) of the Code and the Act; and
WHEREAS, a public hearing was held by the Board on this 4th day of A~ 2015, at the meeting which commenced at the hour of 9:00 a.m., in the Board Chambers, 1600 Pacific Highway, Room 310, San Diego, California, following duly published notice thereof in a newspaper of general circulation in the County of San Diego, on July 21, 2015, and all persons desiring to be heard have been heard; and
WHEREAS, it is intended that this Resolution shall comply with the public approval requirements of Section 147(f) of the Code; provided, however, that this Resolution is neither intended to nor shall it constitute an approval by the Board of the Facilities for any other purpose, ·including, but not limited to, compliance with the California Environmental Quality Act (California Public Resources Code, Section 21100, et seq.) (''CEQA'');
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the Board of Supervisors of the County of San Diego, State of California as follows:
Section 1. The foregoing resolutions are true and correct
Section 2. The Board hereby approves the issuance of the Obligations by the Authority which Obligations may be tax-exempt and/or taxable as approved by the Authority in its resolution, in an amount not to exceed $23,500,000 to finance and refinance the cost of the Facilities. This resolution shall constitute ''host" approval of the issuance of the Obligations within the meaning of Section 147(f) of the Code and shall constitute the approval of the issuance of the Obligations within the meaning of the Act; provided, however, that this Resolution shall not constitute an approval by the Board of Supervisors of the Facilities for any other purposes, including compliance thereof with CEQ A, nor does it constitute an approval of the underlying credit or financial structure of the Obligations. The County shall not bear any responsibility for the issuance of the Obligations, the tax-exempt status of the Obligations, the repayment of the Obligations or any other matter related to the Obligations.
Section 3. All actions heretofore taken by the officers, employees and agents of the County with respect to the approval of the issuance of the Obligations are hereby approved, confirmed and ratified, and the officers and employees of the County and their authorized deputies and agents are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all certificates and documents which they or bond counsel may deem necessary or advisable in order to consummate the issuance of the Obligations and otherwise to effectuate the purposes of this Resolution.
2
Section 4. The adoption of this Resolution shall not obligate the County or any department thereof to (i) provide any financing for the Facilities; (rl) approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the acquisition, construction, rehabilitation or operation of the Facilities; or (iii) make any contribution or advance any funds whatsoever to the Authority.
Section 5. The officers of the County are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing transaction approved hereby.
Section 6. This Resolution shall take effect immediately upon its adoption.
APPROVED AS TO FORM AND LEGALITY THOMAS E. MONTGOMERY, COUNTY COUNSEL
By: RACHEL H. wriT, SENIOR DEPUTY
ON MOTION of Supervisor R. Roberts, seconded by Supervisor Jacob, the above Resolution was passed and adopted by the Board of Supervisors, County of San Diego, State of California, on this 4th day of August, 2015, by the following vote:
AYES: Cox, Jacob, D. Roberts, R. Roberts, Hom
STATE OF CALIFORNIA) County of San Diego )88
I hereby certify that the foregoing is a full, true and correct copy of the Original Resolution entered in the Minutes of the Board of Supervisors.
DAVID HALL Clerk ofthe Board of Supervisors
By: b1 ?'YY'CI IA.J~?..-.. Diana Lopez, De uty
Resolution No. 15-105 Meeting Date: 08/04/15 (13)
3
MASTER LOAN AGREEMENT
among
MUFG UNION BANK, N.A.,
as the Lender
and
CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY,
as the Issuer
and
ST. AUGUSTINE’S SCHOOL OF SAN DIEGO,
as the Borrower
Dated as of October 1, 2015
2015-1637
ARTICLE I
DEFINITIONS ............................................................. 2
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS OF ISSUER AND BORROWER
Section 2.01. Representations, Warranties and Covenants of the Issuer ............................. 16
Section 2.02. Representations, Warranties and Covenants of the Borrower ....................... 17
ARTICLE III
ISSUANCE OF LOAN; APPLICATION OF PROCEEDS
Section 3.01. Loan To Refinance the Prior Obligations and Finance the
Improvements ................................................................................................ 23
Section 3.02. Establishment and Application of Project Fund ............................................ 24
Section 3.03. Term ............................................................................................................... 26
Section 3.04. Costs and Expenses of the Issuer ................................................................... 26
Section 3.05. Limited Obligations of the Issuer .................................................................. 27
Section 3.06. Invalidity of the Borrower Loans ................................................................... 28
ARTICLE IV
REPAYMENT OF THE LOANS
Section 4.01. Interest............................................................................................................ 28
Section 4.02. Payments ........................................................................................................ 29
Section 4.03. Draws ............................................................................................................. 29
Section 4.04. Security for the Loan ..................................................................................... 29
Section 4.05. Deed of Trust ................................................................................................. 30
Section 4.06. Payment on Non Business Days .................................................................... 31
Section 4.07. Borrower Payments to Be Unconditional ...................................................... 31
Section 4.08. Prepayments ................................................................................................... 31
Section 4.09. Restrictions on Transfer of Loans .................................................................. 33
Section 4.10. Repayment of Principal.................................................................................. 34
Section 4.11. Loan Fee......................................................................................................... 34
Section 4.12. Late Charge .................................................................................................... 34
Section 4.13. Default Rate ................................................................................................... 34
Section 4.14. Increased Costs .............................................................................................. 35
Section 4.15. Net of Taxes, Etc............................................................................................ 36
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01. Conditions Precedent to Loan Agreement ..................................................... 37
Section 5.02. Conditions Precedent to Subsequent Draw Requests .................................... 40
Section 5.03. Limitations to Disbursement .......................................................................... 41
ii
ARTICLE VI
SECURITY INTEREST
Section 6.01. Change in Name or Corporate Structure of the Borrower; Change in
Location of the Borrower’s Principal Place of Business ............................... 42
Section 6.02. Security Interest ............................................................................................. 42
Section 6.03. Assignment of Insurance................................................................................ 42
ARTICLE VII
AFFIRMATIVE COVENANTS OF BORROWER
Section 7.01. Maintenance of Facilities ............................................................................... 43
Section 7.02. Compliance with Laws and Obligations ........................................................ 43
Section 7.03. Payment of Taxes and Other Claims ............................................................. 44
Section 7.04. Insurance; Indemnity ..................................................................................... 44
Section 7.05. Reporting Requirements ................................................................................ 47
Section 7.06. Books and Records; Inspection and Examination ......................................... 49
Section 7.07. Performance by the Lender ............................................................................ 49
Section 7.08. Preservation of Existence ............................................................................... 50
Section 7.09. No Liability for Consents or Appointments................................................... 50
Section 7.10. Non-Liability of the Issuer ............................................................................. 50
Section 7.11. Expenses ........................................................................................................ 50
Section 7.12. No Personal Liability ..................................................................................... 51
Section 7.13. Borrower Indemnification of the Issuer ......................................................... 51
Section 7.14. Borrower Indemnification of the Lender ....................................................... 53
Section 7.15. Covenant to Enter into Agreement or Contract to Provide Ongoing
Disclosure ...................................................................................................... 54
Section 7.16. Financial Covenants ....................................................................................... 54
Section 7.17. Deposit Relationship ...................................................................................... 54
Section 7.18. Tax Covenants of the Issuer and the Borrower .............................................. 55
Section 7.19. Office of Foreign Assets Control; Patriot Act Compliance ........................... 57
Section 7.20. Compliance With Documents ........................................................................ 57
Section 7.21. Compliance with ERISA................................................................................ 58
Section 7.22. Environmental Laws ...................................................................................... 58
ARTICLE VIII
NEGATIVE COVENANTS OF BORROWER
Section 8.01. Lien ................................................................................................................ 58
Section 8.02. Sale of Assets ................................................................................................. 58
Section 8.03. Consolidation and Merger.............................................................................. 59
Section 8.04. Accounting ..................................................................................................... 59
Section 8.05. Transfers ........................................................................................................ 59
Section 8.06. Other Indebtedness......................................................................................... 59
Section 8.07. Other Defaults ................................................................................................ 59
Section 8.08. Prohibited Uses .............................................................................................. 60
Section 8.09. Use of Facilities ............................................................................................. 60
Section 8.10. Maintenance of Business ............................................................................... 60
iii
Section 8.11. Restrictive Agreements .................................................................................. 60
Section 8.12. Tax Exempt Status ......................................................................................... 60
Section 8.13. Federal Reserve Board Regulations ............................................................... 60
Section 8.14. Swap Agreements .......................................................................................... 60
Section 8.15. Loan Documents ............................................................................................ 60
Section 8.16. Formation of Subsidiaries and Affiliates ....................................................... 60
ARTICLE IX
DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS
Section 9.01. Eminent Domain ............................................................................................ 61
Section 9.02. Application of Net Proceeds .......................................................................... 61
ARTICLE X
ASSIGNMENT, PARTICIPATION, MORTGAGING AND SELLING
Section 10.01. Assignment by the Lender ............................................................................. 62
Section 10.02. No Sale, Assignment or Leasing by the Borrower ........................................ 62
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
Section 11.01. Events of Default ........................................................................................... 62
Section 11.02. Remedies on Default ...................................................................................... 65
Section 11.03. The Lender’s Right to Perform the Obligations ............................................ 67
Section 11.04. No Remedy Exclusive.................................................................................... 67
ARTICLE XII
MISCELLANEOUS
Section 12.01. Disclaimer of Warranties ............................................................................... 67
Section 12.02. Limitations of Liability .................................................................................. 68
Section 12.03. Additional Payments to the Lender................................................................ 68
Section 12.04. Notices ........................................................................................................... 69
Section 12.05. Binding Effect; Time of the Essence ............................................................. 70
Section 12.06. Severability .................................................................................................... 70
Section 12.07. Amendments .................................................................................................. 70
Section 12.08. Execution in Counterparts.............................................................................. 70
Section 12.09. Applicable Law .............................................................................................. 70
Section 12.10. Jury Trial Waiver ........................................................................................... 70
Section 12.11. Captions ......................................................................................................... 71
Section 12.12. Entire Agreement ........................................................................................... 71
Section 12.13. Waiver ............................................................................................................ 71
Section 12.14. Survivability ................................................................................................... 71
Section 12.15. Usury .............................................................................................................. 71
Section 12.16. Third Party Beneficiary.................................................................................. 72
Section 12.17. Further Assurance and Corrective Instruments.............................................. 72
Section 12.18. Dispute Resolution; Provisional Remedies .................................................... 72
Section 12.19. Arm’s Length Transaction ............................................................................. 73
iv
Section 12.20. Patriot Act ...................................................................................................... 73
EXHIBIT A PROPERTY DESCRIPTION .....................................................................................
EXHIBIT B FORM OF INVESTOR LETTER ...............................................................................
EXHIBIT C MATTERS TO BE ADDRESSED IN OPINION OF COUNSEL OF BORROWER
EXHIBIT D-1 SCHEDULE OF SERIES A LOAN PRINCIPAL PAYMENTS ............................
EXHIBIT D-2 SCHEDULE OF SERIES B LOAN PRINCIPAL PAYMENTS ............................
EXHIBIT E ASSIGNMENT LETTER ...........................................................................................
EXHIBIT F FORM OF PROJECT FUND DRAW REQUEST ......................................................
EXHIBIT G AGGREGATE PRINCIPAL AMOUNT OF SERIES B LOAN OUTSTANDING ..
EXHIBIT H FORM OF REPORTING CERTIFICATE .................................................................
EXHIBIT I FORM OF CERTIFICATE OF COMPLETION .........................................................
MASTER LOAN AGREEMENT
THIS MASTER LOAN AGREEMENT, dated as of October 1, 2015 (this “Loan
Agreement”), among MUFG UNION BANK, N.A., a national banking association (as further
defined herein, the “Lender”), CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY
(the “Issuer”), a public entity duly organized and validly existing under the laws of the State of
California (the “State”), as issuer, and ST. AUGUSTINE’S SCHOOL OF SAN DIEGO, a
California nonprofit religious corporation (as further defined herein, the “Borrower”).
W I T N E S S E T H :
WHEREAS, the Issuer is a joint exercise of powers authority organized and operating
under the provisions of Article 1 through 4 (commencing with Section 6500) of Chapter 5 of
Division 7 of Title I of the Government Code of the State of California (the “Act”); and
WHEREAS, the Issuer is authorized by the Act to issue bonds, notes or other
evidences of indebtedness, or certificates of participation in leases or other agreements, or
enter into loan agreements to, among other things, finance or refinance facilities owned
and/or leased and operated by organizations described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended (the “Code”); and
WHEREAS, the County of San Diego is an associate member of the Issuer; and
WHEREAS, in furtherance of the purposes of the Issuer set forth above, the Issuer
proposes to finance and refinance the cost of design, acquisition, construction, installation,
equipping or furnishing of the Project (as defined herein) on the real property described in
Exhibit A hereto to be owned and operated by the Borrower; and
WHEREAS, the Borrower is a nonprofit religious corporation duly incorporated and
existing under the laws of the State, and an organization described in Section 501(c)(3) of the
Code (as defined herein);
WHEREAS, the Borrower desires to finance and refinance the Project from time to time
on the terms and conditions set forth below;
WHEREAS, in order to finance and refinance the Project, the Issuer intends to issue two
tax-exempt obligations to the Lender (as further defined herein, the “Issuer Loan Obligations”),
the interest on each of which shall be excluded from income of the Lender for Federal income
tax purposes and exempt from State personal income taxes, and lend the proceeds thereof to the
Borrower (as further defined herein, the “Borrower Loans”); and
WHEREAS, for and in consideration of the Borrower Loans, the Borrower agrees, inter
alia, to make loan payments (as further defined herein, the “Payments”) sufficient to pay on the
dates specified herein, the principal of, premium, if any, interest thereon and Additional
Payments (as defined herein); and
WHEREAS, the Issuer will assign the Payments due under the Borrower Loans pursuant
to this Loan Agreement (except any payments due to the Issuer pursuant to Reserved Issuer
2
Rights (as hereinafter defined)) to the Lender to satisfy the Issuer’s obligations under the Issuer
Loan Obligations; and
WHEREAS, the Borrower shall make Payments directly to the Lender as assignee of the
Issuer; and
WHEREAS, the Issuer, the Lender and the Borrower have duly authorized the execution
and delivery of this Loan Agreement;
NOW, THEREFORE, in consideration of the payments to be made hereunder and the
mutual covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
The following terms used herein will have the meanings indicated below unless the
context clearly requires otherwise.
“Act” means the Joint Powers Act, comprising Articles 1, 2, 3, and 4, of Chapter 5 of
Division 7 of Title 1 of the Government Code of the State (commencing with Section 6500), as
now in effect.
“Additional Payments” means the amounts, other than Payments, payable by the
Borrower pursuant to the provisions of this Loan Agreement, including, without limitation, the
Issuer Fees and Expenses, amounts pursuant to Section 12.03 hereof, indemnity payments and
reimbursement of advances due hereunder.
“Affiliate” means, with respect to any Person, any Person that directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under common control
with, such first Person. A Person shall be deemed to control another Person for the purposes of
this definition if such first Person possesses, directly or indirectly, the power to direct, or cause
the direction of, the management and policies of the second Person, whether through the
ownership of voting securities, common directors, trustees or officers, by contract or otherwise
and, with respect to the Lender, includes any affiliate of the Lender or any related entity, 100%
of whose common stock or ownership interests is directly or indirectly owned by the Lender.
“Anti-Terrorism Laws” has the meaning set forth in Section 2.02(y) hereof.
“Applicable Factor” means (i) during the period from and including the Closing Date
through the Initial Prepayment Date, 70%; and (ii) during any other period, 70%, or, with a
favorable opinion of Special Counsel, such other percentage as may be designated in writing by
the Lender as the Applicable Factor for such period pursuant to Section 4.08(e) hereof.
“Applicable Loan Rate” means, with respect for each Interest Period, the interest rate per
annum established on each Computation Date equal to the product of (x) sum of (a) the
Applicable Spread plus (b) the product of (i) the LIBOR Rate and (ii) the Applicable Factor and
(y) the Margin Rate Factor.
3
“Applicable Spread” means the following:
(a) During the period from and including the Closing Date through the Initial
Prepayment Date, one hundred seven basis points (1.07%).
(b) During any period after any Prepayment Date, the number of basis points
determined by the Market Agent on or before the first day of such period and designated by the
Borrower in accordance with Section 4.08(e) hereof that, when added to the product of the
LIBOR Index multiplied by the Applicable Factor (and multiplied by the Margin Rate Factor), as
applicable, would equal the minimum interest rate per annum that would enable the Loans to be
sold or advanced on such date at a price equal to the principal amount thereof (without regard to
accrued interest, if any, thereon).
“Architect” means the architect for the Improvements selected by the Borrower, and its
successors and assigns.
“Assignment Agreement” means the Assignment Agreement, dated as of October 1, 2015,
between the Issuer and the Lender.
“Authorized Borrower Representative” means any two or more of the Prior Provincial of
the Province of St. Augustine in California of the Order of St. Augustine, the President of the
Borrower’s St. Augustine High School, and the Executive Director of Finance and Facilities of
the Borrower, or any other person designated in writing by the Members of the Borrower to
Lender and the Issuer; provided; however, that solely for purposes of making draws under the
Series B Borrower Loan, only one Authorized Borrower Representative need sign a Project Fund
Draw Request.
“Borrower” means (a) St. Augustine’s School of San Diego, a California nonprofit
religious corporation; (b) any surviving, resulting or transferee entity thereof permitted pursuant
to the terms of this Loan Agreement; and (c) except where the context requires otherwise, any
assignee(s) of the Borrower permitted pursuant to the terms of this Loan Agreement.
“Borrower Documents” means this Loan Agreement, the Deed of Trust, Environmental
Compliance Agreement, the Project Fund Disbursement Agreement and the Tax Regulatory
Agreement.
“Borrower Loans” means, collectively, the Series A Borrower Loan and the Series B
Borrower Loan made to the Borrower from the Issuer pursuant to this Loan Agreement.
“Business Day” means a day other than a Saturday or Sunday on which banks in the State
of California are open for business for the funding of corporate loans; provided however, that
when used in connection with any LIBOR Rate determination, “Business Day” means a day
which is also both (i) a day on which dealings in U.S. Dollar deposits in London, England, may
be carried on by the Lender; and (ii) a day which is not a Saturday or Sunday on which banks in
New York City, New York, are open for business for the funding of corporate loans.
“Capital Campaign Contributions” means contributions and pledges associated with any
capital campaign of the Borrower.
4
“Change in Law” means the occurrence, after the Closing Date, of any of the following:
(a) the adoption or taking effect of any Law, including, without limitation, Risk-Based Capital
Guidelines, (b) any change in any Law or in the administration, interpretation, implementation or
application thereof by any Governmental Authority or (c) the making or issuance of any request,
rule, ruling, guideline, regulation or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, ruling,
guidelines, regulations or directives thereunder or issued in connection therewith and (ii) all
requests, rules, rulings, guidelines, regulations or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States of America or foreign regulatory authorities shall in each
case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.
“Closing Date” means October 1, 2015, subject to the satisfaction of, or waiver by the
Lender, of the conditions precedent set forth in Section 5.01 hereof.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” means the Project Fund Collateral (as defined in Section 4.04 hereof).
“Completion Notice” means a certificate stating that the Improvements are complete and
that no further Draw Requests will be submitted.
“Computation Date” means the second Business Day immediately preceding each Reset
Date.
“Contractor” means, collectively or severally, as the context thereof shall suggest or
require the General Contractor and any other person or entity with whom the Borrower contracts
for the construction of the Improvements or any portion thereof.
“Contracts and Permits Assignment Agreements” means, collectively, the (a) Assignment
of Architect’s Agreement and Plans and Specifications, dated as of even date herewith, by the
Borrower for the benefit of the Issuer and consented to by the Architect, and (b) Assignment of
Construction Contract, dated as of even date herewith, by the Borrower for the benefit of the
Issuer and consented to by the General Contractor, in each case, which is being assigned to the
Lender pursuant to the Assignment Agreement.
“Controlled Group” means all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control which, together with
the Borrower, are treated as a single employer under Section 414 of the Code.
“Debt Service Coverage Ratio” means for each fiscal year, the sum of (i) operating
profits (excluding non-cash contributions and restricted contributions but including unrestricted
cash contributions and cash contributions released from restriction) plus (ii) depreciation plus
(iii) interest expense divided by the sum of (A) the current portion of long-term debt plus (B)
interest expense.
5
“Deed of Trust” means the Construction Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing (Construction Trust Deed), dated as of even date herewith,
executed by the Borrower for the benefit of the Issuer, and any modifications thereto with respect
to the real property located at 3266 Nutmeg Street, San Diego, California 92104, which is being
assigned to the Lender pursuant to the Assignment Agreement.
“Default” means an event that, with giving of notice or passage of time or both, would
constitute an Event of Default as provided in Article XI hereof.
“Default Rate” means the Applicable Loan Rate plus 3%, but not to exceed the highest
rate permitted by applicable law.
“Determination of Taxability” means any determination, decision, decree or advisement
by the Commissioner of Internal Revenue, or any District Director of Internal Revenue or any
court of competent jurisdiction, or a written opinion obtained by the Lender and provided to the
Borrower, of nationally recognized bond counsel qualified in such matters, that an Event of
Taxability has occurred. A Determination of Taxability also shall be deemed to have occurred
on the first to occur of the following:
(a) the date when the Borrower files any statement, supplemental statement,
or other tax schedule, return or document, which discloses that an Event of Taxability has
occurred;
(b) the effective date of any federal legislation enacted or federal rule or
regulation promulgated after the date of this Loan Agreement that causes an Event of
Taxability; or
(c) if upon sale, lease or other deliberate action within the meaning of Treas.
Reg. § 1.141-2(d), the failure to receive an unqualified opinion of Special Counsel to the
effect that such action will not cause interest on the Issuer Loan Obligations to become
includable in the gross income of the recipient.
“Draw Request” means a Project Fund Draw Request substantially in the form attached
hereto as Exhibit F.
“Environmental Compliance Agreement” means the Environmental Compliance
Agreement, dated as of October 1, 2015, by the Borrower for the benefit of the Issuer, which is
being assigned to the Lender pursuant to the Assignment Agreement.
“Environmental Laws” means any federal, state or local law (whether imposed by statute,
or administrative or judicial order, or common law), now or hereafter enacted, governing health,
safety, industrial hygiene, the environment or natural resources, or Hazardous Materials,
including, such laws governing or regulating the use, generation, storage, removal, recovery,
treatment, handling, transport, disposal, control, discharge of, or exposure to, Hazardous
Materials.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, and regulations thereunder, in each case as in effect
6
from time to time. References to Sections of ERISA shall be construed also to refer to any
successor Sections.
“ERISA Event” means (a) a reportable event (as defined in ERISA) with respect to a
Plan; (b) a withdrawal by the Borrower or any member of the Controlled Group from a Plan
subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as
defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the
Borrower or any member of the Controlled Group or notification that a Plan is in reorganization;
(d) the filing of a notice of intent to terminate a Plan, the treatment of a Plan amendment as a
termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by
the PBGC to terminate a Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any
Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any
member of the Controlled Group.
“Event of Default” has the meaning set forth in Section 11.01 hereof.
“Event of Taxability” means: (a) the application of the proceeds of the Issuer Loan
Obligations, or other amounts treated as “gross proceeds” of the Issuer Loan Obligation, in such
manner that such the Issuer Loan Obligations become an “arbitrage bond” within the meaning of
Code Sections 103(b)(2) and 148, and with the result that interest on such the Issuer Loan
Obligations is or becomes includable in the gross income (as defined in Code Section 61) of the
Holder of the Issuer Loan Obligations; (b) if as the result of any act, failure to act or use of the
proceeds of any portion of the Issuer Loan Obligations or the Project or any misrepresentation or
inaccuracy in any of the representations, warranties or covenants contained in this Loan
Agreement by the Issuer or the Borrower or the enactment of any federal legislation or the
promulgation of any federal rule or regulation or a change in the interpretation of any law after
the date of this Loan Agreement, the interest on the Issuer Loan Obligations is or becomes
includable in a Holder’s gross income (as defined in Code Section 61); (c) any revocation of the
determination letter from the Internal Revenue Service regarding status of the Borrower as a
501(c)(3) corporation or (d) the entry of any decree or judgment by a court of competent
jurisdiction, or the taking of any official action by the Internal Revenue Service or the
Department of the Treasury, which decree, judgment or action shall be final under applicable
procedural law, in either case, which has the effect of causing interest paid or payable on the
Issuer Loan Obligations to become includable, in whole or in part, in the gross income of the
Holder’s for federal income tax purposes with respect to the Loan .
“Excess Interest Amount” has the meaning set forth in Section 4.01(c) hereof.
“Excluded Taxes” means, with respect to the Lender, (a) taxes imposed on or measured
by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of
net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of
which the Lender is organized or in which its principal office is located, and (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located.
7
“Facilities” means, collectively, (a) the Improvements and all buildings, structures and
other improvements situated, placed or constructed on the Property; and (b) all materials,
apparatus and other items of personal property owned by the Borrower and attached to or
installed in the Facilities, including (without limitation) water, gas, electrical, storm and sanitary
sewer facilities and all other utilities whether or not situated in easements.
“Financed Facilities” means collectively the portion of the Improvements financed with
the proceeds of the Borrower Loans.
“Fiscal Year” means the twelve month period from July 1 through the following June 30.
“GAAP” shall refer to generally accepted accounting principles in the United States as in
effect from time to time.
“General Contractor” means the general contractor for the Improvements selected by the
Borrower, and its successors and assigns.
“Governmental Authority” means the government of the United States of America or any
other nation or any political subdivision thereof or any governmental or quasi-governmental
entity, including any court, department, commission, board, bureau, agency, administration,
central bank, service, district or other instrumentality of any governmental entity or other entity
exercising executive, legislative, judicial, taxing, regulatory, fiscal, monetary or administrative
powers or functions of or pertaining to government (including any supra-national bodies such as
the European Union or European Central Bank), or any arbitrator, mediator or other Person with
authority to bind a party at law.
“Hazardous Materials” means any
(a) Substance, product, waste or other material of any nature whatsoever
which is or becomes listed, regulated, or addressed pursuant to any or all of the following
statutes and regulations, as the same may be amended from time to time:
(i) The Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Sections 9601, et seq. (“CERCLA”);
(ii) The Hazardous Materials Transportation Act, 49 U.S.C. Sections
1801, et seq.;
(iii) The Resource Conservation and Recovery Act, 42 U.S.C. Sections
6901, et seq. (“RCRA”);
(iv) The Toxic Substances Control Act, 15 U.S.C. Sections 2601, et
seq.;
(v) The Clean Water Act, 33 U.S.C. Sections 1251, et seq.;
(vi) The California Hazardous Waste Control Act, California Health
and Safety Code Sections 25100, et seq.;
8
(vii) The California Hazardous Substance Account Act, California
Health and Safety Code Sections 25300, et seq.;
(viii) The California Safe Drinking Water and Toxic Enforcement Act,
California Health and Safety Code Sections 25249.5, et seq.;
(ix) California Health and Safety Code Sections 25280, et seq.
(pertaining to underground storage of Hazardous Materials);
(x) The California Hazardous Waste Management Act, California
Health and Safety Code Sections 25179.1, et seq.;
(xi) California Health and Safety Code Sections 25500, et seq.
(pertaining to hazardous materials response plans and inventory);
(xii) The California Porter-Cologne Water Quality Control Act,
California Water Code Sections 13000, et seq.;
(xiii) California Civil Code Section 2929.5 (pertaining to inspections
relating to hazardous substances); or
(xiv) All other existing and future federal, state and local laws,
ordinances, rules, regulations, orders, requirements, and decrees regulating,
relating to, or imposing liability or standards of conduct concerning any
hazardous, toxic or dangerous waste, substance or material;
(b) Any substance, product, waste or other material of any nature whatsoever
which may give rise to liability (i) under any of the statutes or regulations described in
clauses (i) through (xiv) of Section (a) above; (ii) under any statutory or common law
theory, including negligence, trespass, intentional tort, nuisance or strict liability; or (iii)
under any reported decisions of any state or federal court;
(c) Petroleum, petroleum products and by-products, gasoline or crude oil,
other than petroleum and petroleum products contained within regularly operated motor
vehicles (including without limitation golf carts and lawn maintenance vehicles); and
(d) Asbestos or asbestos containing materials.
“Holder” means either the Lender or an assignee to which the Loan is assigned pursuant
to Section 10.01 hereof.
“Improvements” means the capital improvements to be financed in part, from time to
time, with proceeds of the Borrower Loans and include a new two story, approximately 51,000
square foot student activities center, a new surface parking lot with approximately 48 parking
spaces, a new athletic practice field and related infrastructure and other ancillary facilities located
at the Property and financed with the Borrower Loans.
“Indemnified Taxes” means Taxes other than Excluded Taxes.
9
“Initial Prepayment Date” means November 1, 2027.
“Interest-Only Period” means, with respect to the Series B Loan, the period from the
Closing Date to (but not including) November 1, 2017.
“Interest Period” means the period from, and including, the first Business Day of each
calendar month to, but excluding, the first Business Day of the next succeeding calendar month;
provided, however, that the first Interest Period shall begin on (and include) the Closing Date and
the final Interest Period shall end on the day next preceding the Maturity Date.
“Issuer” means California Enterprise Development Authority, acting as issuer under this
Loan Agreement.
“Issuer Annual Fee” means $1,500 per year, and payable in accordance with Section 3.04
hereof.
“Issuer Documents” means this Loan Agreement, the Assignment Agreement and the Tax
Regulatory Agreement.
“Issuer Fees and Expenses” means, with respect to this Loan Agreement, the fee payable
to the Issuer for the Issuer’s services in connection with the preparation, review and execution of
this Loan Agreement and the Issuer’s fees, costs and expenses, as further defined in Sections
3.04 and 7.11 hereof.
“Issuer Issuance Fee” means $25,000, payable on the Closing Date.
“Issuer Loan Obligations” means, collectively, the Series A Issuer Loan Obligation and
the Series B Issuer Loan Obligation.
“Law” means any treaty or any federal, regional, state and local law, statute, rule,
ordinance, regulation, code, license, authorization, decision, injunction, interpretation, order or
decree of any court or other Governmental Authority.
“Lender” means (a) MUFG Union Bank, N.A., a national banking association; (b) any
surviving, resulting or transferee corporation of MUFG Union Bank, N.A.; and (c) if this Loan
Agreement and the Issuer Loan Obligations have been assigned by the Lender pursuant to
Section 10.01 hereof, such assignee shall be considered the Lender with respect to this Loan
Agreement and the Issuer Loan Obligations, subject to Section 10.01 hereof.
“Lender Fees” means, with respect to this Loan Agreement, the fees and expenses
payable to the Lender for the Lender’s services in connection with the preparation, review and
execution of this Loan Agreement, any enforcement of this Loan Agreement and such other fees
expenses as further set forth in this Loan Agreement (including, without limitation, those fees
and expenses further defined in Section 12.03 hereof).
“Lender’s Inspector” shall have the meaning set forth in Section 3.02(c) hereof.
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“LIBOR Rate” means the rate of interest per annum determined by the Lender based on
the rate for United States dollar deposits for delivery on the Reset Date for a period equal to one
month as reported on Reuters Screen LIBOR01 page (or any successor page) at approximately
11:00 a.m., London time, on each Computation Date (or if not so reported, then as determined by
the Lender from another recognized source of interbank quotation).
“Lien” shall have the meaning set forth in Section 8.01 hereof.
“Loans” means, collectively, the Series A Loan and the Series B Loan.
“Loan Agreement” means, collectively, this Master Loan Agreement, including the
Exhibits hereto, as any of the same may be supplemented or amended from time to time in
accordance with the terms hereof.
“Loan Documents” means, collectively, this Loan Agreement, the Assignment
Agreement, the Deed of Trust, the Contracts and Permits Assignment Agreements, the
Environmental Compliance Agreement, the Project Fund Disbursement Agreement and the Tax
Regulatory Agreement.
“Loan Proceeds” means the aggregate amount of up to $23,500,000 to be paid or
provided by the Issuer to the Borrower (representing the principal amount of the Loans in an
amount up to $23,500,000).
“Margin Rate Factor” means the greater of (i) 1.0 and (ii) the product of (A) one minus
the Maximum Federal Corporate Tax Rate multiplied by (B) 1.53846. The effective date of any
change in the Margin Rate Factor shall be the effective date of the decrease or increase (as
applicable) in the Maximum Federal Corporate Tax Rate resulting in such change.
“Margin Stock” shall have the meaning assigned to such term in Regulation U
promulgated by the Board of Directors of the Federal Reserve System, as now and hereafter from
time to time in effect.
“Market Agent” means a third-party financial advisory firm, investment banking firm,
commercial bank (including, without limitation, MUFG Union Bank, N.A.) or any other
financial institution with experience in pricing information for tax-exempt municipal securities,
as appointed by the Borrower (with consent of the Lender), which consent shall not be
unreasonably withheld) to act as Market Agent hereunder and the successors thereof.
“Material Adverse Effect” means: (a) a material adverse change in, or a material adverse
effect upon, the operations, business, properties, liabilities (actual or contingent), condition
(financial or otherwise) or prospects of the Borrower; (b) a material impairment of the ability of
the Borrower to perform its obligations under any Loan Document; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability against the Borrower of any
Loan Document to which it is a party.
“Maturity Date” means (a) November 1, 2047, with respect to the Series A Loan, and (b)
and November 1, 2047, with respect to the Series B Loan.
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“Maximum Federal Corporate Tax Rate” means the maximum rate of income taxation
imposed on corporations pursuant to Section 11(b) of the Code, as in effect from time to time
(or, if as a result of a change in the Code, the rate of income taxation imposed on corporations
generally shall not be applicable to the Lender, the maximum statutory rate of federal income
taxation which could apply to the Lender).
“Net Proceeds” means any insurance proceeds or condemnation award paid with respect
to the Facilities or the Property, to the extent remaining after payment therefrom of all reasonable
expenses incurred in the collection thereof.
“Net Unrestricted Cash and Investments” means the sum of the following unrestricted
(excluding items specifically restricted (whether permanently or temporarily) as to use for a use
that is inconsistent with the payment of debt service on Indebtedness of the Borrower) and
unencumbered items: cash, cash equivalents and long-term marketable and liquid investments
less the aggregate face amount of any short-term indebtedness; provided that unrestricted and
unencumbered cash, cash equivalents, long term marketable securities and liquid investments
shall exclude the following: trustee-held funds, debt service funds, construction funds, debt
service reserve funds, malpractice funds, litigation reserves, self-insurance and captive insurer
funds, deferred revenues, tuition paid in advance, pension and retirement funds and the set aside
or reserve for any liability other than operating expenses, any collateral posted pursuant to the
terms of a Swap Contract and investments that are not readily marketable such as hedge funds,
alternative investments, limited partnerships and equity investments in joint ventures.
“Obligation” means Payments and Additional Payments payable by the Borrower
pursuant to the provisions of this Loan Agreement.
“OFAC” means Office of Foreign Assets Control.
“Other Taxes” means all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment made hereunder or
under any other Loan Document or from the execution, delivery or enforcement of, or otherwise
with respect to, this Loan Agreement or any other Loan Document.
“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Title III of Pub. L. 107 56.
“Payments” means those payments of principal and interest (including, without
limitation, Excess Interest pursuant to Section 4.01(c) hereof) with respect to the Loans
(excluding, Additional Payments, the Issuer Fees and Expenses and Lender Fees payable to the
Lender and the Issuer hereunder) payable by the Borrower pursuant to the provisions of this
Loan Agreement. Payments shall be payable by the Borrower directly to the Lender as assignee
of the Issuer, in the amounts and at the times as set forth in this Loan Agreement.
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Permitted Encumbrances” means (a) liens and security interests securing indebtedness
owed by the Borrower to the Issuer and/or the Lender (b) liens arising by reason of good faith
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deposits in connection with tenders, leases of real estate, bids or contracts (other than contracts
for the payment of borrowed money); (c) any lien arising by reason of deposits with, or the
giving of any form of security to, any governmental agency or any body created or approved by
law or governmental regulation for any purpose at any time as required by law or governmental
regulation as a condition to the transaction of any business or the exercise of any privilege or
license, or to enable the Borrower to maintain self-insurance or to participate in any funds
established to cover any insurance risks or in connection with workers’ compensation,
unemployment insurance, pensions or profit sharing plans or other social security plans or
programs, or to share in the privileges or benefits required for corporations participating in such
arrangements; (d) liens arising by reason of good faith deposits made by or to the Borrower in
the ordinary course of business (for other than borrowed money), deposits by the Borrower to
secure public or statutory obligations or deposits to secure, or in lieu of, surety, stay or appeal
bonds, and deposits as security for the payment of taxes or assessments or other similar charges;
(e) attachment or judgment liens not constituting a default hereunder or under the Deed of Trust,
or any attachment or judgment lien against the Borrower so long as such judgment is being
contested in good faith and execution thereon is stayed; (f) rights reserved to or vested in any
municipality or public authority by the terms of any right, power, franchise, grant, license, permit
or provision of law affecting the Property, to: (1) terminate such right, power, franchise, grant,
license, or permit, provided, that the exercise of such right would not materially impair the use of
such Property in the ordinary course by the Borrower or materially and adversely affect the value
thereof, or (2) purchase, condemn appropriate or recapture, or designate a purchaser of, the
Property or any portion thereof; (g) liens for taxes, assessments, or similar charges either not yet
due or being contested in good faith; (h) liens of materialmen, mechanics, warehousemen, or
carriers, or other like liens arising in the ordinary course of business and securing obligations
which are not yet delinquent; or which are being contested in good faith for a period no longer
than the ninety (90) days after the due date of such lien; (i) easements, rights-of-way, servitudes,
restrictions, deed restrictions, oil, gas, or other mineral reservations and other minor defects,
encumbrances, and irregularities in the title to the Property which do not materially impair the
use of such Property in the ordinary course by the Borrower or materially and adversely affect
the value thereof; (j) rights reserved to or vested in any municipality or public authority to
control or regulate the Property or to use such Property in any manner, which rights do not
materially impair the use of such Property or materially and adversely affect the value thereof, to
the extent that it affects title to the Property; (k) liens on property received by the Borrower
through gifts, grants or bequests, such liens being due to restrictions on such gifts, grants or
bequests or the income thereon, so long as the fair market value of any such property is greater
than the amount of the indebtedness secured by the lien on such property; (l) liens on equipment
purchased or leased with proceeds of indebtedness permitted by Section 8.06 hereof; and (m)
Liens approved in writing by the Lender in its sole discretion on a case-by-case basis.
“Person” means any individual, corporation, not for profit corporation, partnership,
limited liability company, joint venture, association, professional association, joint stock
company, trust, unincorporated organization, government or any agency or political subdivision
thereof or any other form of entity.
“Plan” means, with respect to the Borrower at any time, an employee pension benefit
plan which is covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and either (i) is maintained, or has within the preceding five plan years
13
been maintained, by a member of the Controlled Group for employees of a member of the
Controlled Group of which the Borrower is a part, (ii) is maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer makes
contributions and to which a member of the Controlled Group of which the Borrower is a part is
then making or accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
“Plans and Specifications” means the Borrower’s plans and specifications for the
Improvements, as amended from time to time, which include a construction budget for the
Improvements and an allocation of the sources and uses of funds for the Improvements.
“Prepayment Date” means (i) the Initial Prepayment Date, and (ii) the date provided by
the Lender in response to the Borrower’s written request for an extension pursuant to Section
4.08(e) hereof.
“Prepayment Fee” means an amount equal to the present value of the product of: (i) the
difference (but not less than zero) between (a) the interest rate applicable to the principal amount
which is being prepaid, and (b) the return which the Lender could obtain if it used the amount of
such prepayment of principal to purchase at bid price regularly quoted securities issued by the
United States having a maturity date most closely coinciding with the sooner of the next Reset
Date or the Maturity Date, and such securities were held by the Lender until such date (“Yield
Rate”); (ii) a fraction, the numerator of which is the number of days in the period between the
date of prepayment and the sooner of the next Reset Date or the Maturity Date and the
denominator of which is 360; and (iii) the amount of the principal so prepaid. Present value
under this Loan Agreement is determined by discounting the above product to present value
using the Yield Rate as the annual discount factor. The Lender shall provide the Borrower a
statement setting forth the computation of the Prepayment Fee in reasonable detail and such
statement shall be conclusive if reasonably determined. The Borrower acknowledges that (i) the
Lender establishes an interest rate upon the understanding that it applies for the entire Interest
Period, and (ii) the Lender would not lend to the Borrower without the Borrower’s express
agreement to pay the Lender the prepayment fee described above.
“Prior Interest Payment” means a payment of interest on the Issuer Loan Obligations
made on or prior to the date of any Determination of Taxability that becomes includable in a
Holder’s gross income (as defined in Code Section 61).
“Prior Obligations” means the Borrower’s obligations under the Loan Agreement, dated
as of June 1, 2006, by and among Lender, the California Municipal Finance Authority and the
Borrower, currently outstanding in the aggregate principal amount of approximately
$10,443,461.66.
“Project” means (i) financing of design, acquisition, construction, installation, equipping
or furnishing of the Improvements, (ii) refinancing the cost of acquiring, improving, renovating,
remodeling, furnishing and equipping various portions of the Property financed with proceeds of
the Prior Obligations, and (iii) paying certain costs of issuing the Loan.
14
“Project Costs” means the amount paid or to be paid for any portion of the Project
incurred by the Borrower in connection with the Project and as permitted under the Act,
including closing costs for the Loan.
“Project Fund” means the Project Fund established pursuant to Section 3.04 of this Loan
Agreement.
“Project Fund Disbursement Agreement” means the Construction Fund Disbursement
Agreement dated as of the date hereof by and between the Lender and the Borrower.
“Property” means the real property identified as the “Property” in Exhibit A hereto,
together with any greater estate therein as hereafter may be acquired by the Borrower.
“Qualified Institutional Buyer” shall have the meaning ascribed thereto in Rule 144A of
the Securities Act of 1933, as amended.
“Reserved Issuer Rights” means the Issuer’s rights to Additional Payments, the Issuer
Fees and Expenses, indemnification, notices, opinions, certifications, information, inspections
and consents pursuant to this Loan Agreement and the Tax Regulatory Agreement.
“Reset Date” means the first Business Day of each calendar month.
“Risk-Based Capital Guidelines” means (i) the risk-based capital guidelines in effect in
the United States on the Closing Date, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the United States including
transition rules, and any amendments to such regulations adopted prior to the Closing Date.
“Series A Borrower Loan” means the $10,443,461.66 loan from the Issuer to the
Borrower made under this Loan Agreement.
“Series A Issuer Loan Obligation” means the $10,443,461.66 loan from Lender to the
Issuer made under this Loan Agreement.
“Series A Loan” means the loan from the Lender to the Issuer evidenced by the Series A
Issuer Loan Obligation and by the Issuer to the Borrower evidenced by the related Series A
Borrower Loan under this Loan Agreement.
“Series B Borrower Loan” means the $13,056,538.34 loan from the Issuer to the
Borrower made under Loan Agreement.
“Series B Issuer Loan Obligation” means the $13,056,538.34 loan from Lender to the
Issuer made under this Loan Agreement.
“Series B Loan” means the loan from the Lender to the Issuer evidenced by the Series B
Issuer Loan Obligation and by the Issuer to the Borrower evidenced by the related Series B
Borrower Loan under this Loan Agreement.
15
“Special Counsel” means any firm of nationally recognized municipal bond attorneys,
selected by the Issuer and acceptable to the Lender and the Borrower, experienced in the
issuance of municipal bonds and matters relating to the exclusion of the interest thereon from
gross income for federal income tax purposes.
“State” means the State of California.
Subsidiary” of a Person means (i) any corporation more than 50% of the outstanding
securities having ordinary voting power of which shall at the time be owned or controlled,
directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and
one or more of its Subsidiaries, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
“Swap Agreement” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index swaps or options, bond or bond price or
bond index swaps or options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of the foregoing),
whether or not any such transaction is governed by or subject to any master agreement, and
(b) any and all transactions of any kind, and the related confirmations, which are subject to the
terms and conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign Exchange
Master Agreement, or any other master agreement (any such master agreement, together with
any related schedules, a “Master Agreement”), including any such obligations or liabilities under
any Master Agreement.
“Taxable Date” means the date on which interest on the Issuer Loan Obligations is first
includable in gross income of the Lender thereof as a result of an Event of Taxability as such a
date is established pursuant to a Determination of Taxability.
“Taxable Equivalent Rate” means, with respect to any interest payment (including
payments made prior to a Determination of Taxability) on the Issuer Loan Obligations, an annual
interest rate equal to the product of (i) the Applicable Loan Rate (as in effect from time to time)
and (ii) 1.54.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges imposed by any
Governmental Authority, including any interest, fines, additions to tax or penalties applicable
thereto.
“Tax Regulatory Agreement” means the Tax Regulatory Agreement dated the Closing
Date executed and delivered by the Issuer and the Borrower, together with any supplements or
certificates related thereto.
16
“Title Insurer” means Fidelity National Title.
“Title Policy” means an ALTA (or equivalent) mortgagee policy of title insurance with
coverage in an amount equal to the principal amount of the Loan, with reinsurance and
endorsements as Lender may require, containing no exceptions to title (other than Permitted
Encumbrances) which are unacceptable to Lender, and insuring that the Deed of Trust is a first-
priority lien on the Property. Without limitation, such policy shall (a) be in the 2006 ALTA form
or, if not available, the form commonly used in the State, insuring Lender and its successors and
assigns; and (b) include those endorsements and/or affirmative coverages approved by Lender, as
evidenced by the final approved title policy.
“Unfunded Vested Liabilities” means, with respect to any Plan at any time, the amount
(if any) by which (i) the present value of all vested nonforfeitable accrued benefits under such
Plan exceeds (ii) the fair market value of all Plan assets allocable to such benefits, all determined
as of the then most recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the Controlled Group to the PBGC or such Plan
under Title IV of ERISA.
“Welfare Plan” means a “welfare plan,” as such term is defined in Section 3(1) of
ERISA.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF ISSUER AND BORROWER
Section 2.01. Representations, Warranties and Covenants of the Issuer. The Issuer
represents and warrants, as of the date hereof, and covenants, for the benefit of the Lender and
the Borrower, as follows:
(a) The Issuer is a public entity duly organized and existing under the law of
the State. Under the provisions of the Act, the Issuer has the power to enter into the
transactions contemplated by this Loan Agreement and to carry out its obligations
hereunder and under the other the Issuer Documents. By proper action, the Issuer has
duly authorized the execution, delivery and performance of its obligations under the
Issuer Documents.
(b) All applicable requirements have been met and procedures have occurred
such that the Issuer Documents are valid and binding obligations of the Issuer
enforceable in accordance with their respective terms except as enforcement may be
limited by bankruptcy, insolvency, moratorium, or similar laws affecting the enforcement
of creditors’ rights generally, by equitable principles, by the exercise of judicial
discretion in appropriate cases and by the limitation on legal remedies against agencies of
the State. The Issuer has taken all necessary action and has complied with all applicable
provisions of the Act, including but not limited to the making of any findings required by
the Act, required to make the Issuer Documents the valid and binding obligations of the
Issuer.
17
(c) Pursuant to this Loan Agreement and the Assignment Agreement, the
Issuer has assigned to the Lender all of the Issuer’s rights (except Reserved Issuer Rights)
in the Project, this Loan Agreement, the Payments and all other Borrower Documents
(except the Tax Regulatory Agreement), including the assignment of all rights in any
security interest in the Collateral granted to the Issuer by the Borrower.
(d) The execution and delivery of the Issuer Documents and compliance with
the provisions of the Issuer Documents under the circumstances contemplated thereby
will not in any respect conflict with, or constitute on the part of the Issuer a material
breach or default under any agreement or other instrument to which the Issuer is a party,
or any existing law, administrative regulation, court order or consent decree to which the
Issuer is subject in a manner that is reasonably likely to have a material adverse effect on
the Issuer’s ability to issue or deliver the Issuer Loan Obligations, or its ability to
execute, deliver or comply with the Issuer Documents and the transactions contemplated
thereby.
(e) To the current actual knowledge of the officers of the Issuer, there is no
action, suit or proceeding pending before or by any court for which service of process has
been duly completed as to the Issuer and, to the current actual knowledge of the Issuer’s
officers, there is no action, suit or proceeding before any court threatened against the
Issuer or any proceeding, inquiry or investigation threatened by or pending before any
public body against the Issuer, (i) challenging the Issuer’s authority to enter into the
Issuer Documents or (ii) wherein an unfavorable ruling or finding would materially
adversely affect the enforceability of the Issuer Documents, the exclusion of the interest
from gross income for federal tax purposes under the Code, or would have a material
adverse effect on the Issuer’s ability to perform its obligations with respect to any of the
transactions contemplated by this Loan Agreement.
(f) The Issuer will submit or cause to be submitted to the Internal Revenue
Service a Form 8038 (or other information reporting statement) at the time and in the
form required by the Code.
(g) To the best knowledge of the Issuer’s officers, no officer or other official
of the Issuer has any financial interest in the Borrower or in the transactions contemplated
by this Loan Agreement.
Section 2.02. Representations, Warranties and Covenants of the Borrower. The
Borrower represents and warrants, as of the date hereof, and covenants, for the benefit of the
Lender and the Issuer as follows:
(a) The Borrower is a nonprofit religious corporation duly organized, validly
existing and in good standing under the laws of the State of California, authorized to
purchase and hold real and personal property and finance or refinance the same, and has
full legal right, power and authority to enter into the Loan Documents and to carry out all
of its obligations under and consummate all transactions contemplated hereby and by the
other Loan Documents and by proper corporate action has duly authorized the execution,
delivery and performance of the other Loan Documents. The Borrower is duly licensed
18
to operate and maintain its existing facilities and has all necessary power and authority to
conduct the business now being conducted by it and as contemplated by this Loan
Agreement
(b) The Borrower Documents have been duly authorized, executed and
delivered by the Borrower.
(c) Assuming due execution and delivery by the other parties thereto, this
Loan Agreement and the other Borrower Documents constitute the legal, valid and
binding agreements of the Borrower enforceable against the Borrower by the Issuer or the
Lender, as appropriate, in accordance with their respective terms; except in each case as
enforcement may be limited by bankruptcy, insolvency or other laws affecting the
enforcement of creditors’ rights generally, by the application of equitable principles
regardless of whether enforcement is sought in a proceeding at law or in equity and by
public policy and by commercial reasonableness.
(d) The execution and delivery of the Loan Documents by the Borrower, the
consummation of the transactions herein and therein contemplated and the fulfillment of
or compliance with the terms and conditions hereof and thereof by the Borrower, do not
conflict with or constitute a violation or breach of or default (with due notice or the
passage of time or both) under the articles of incorporation and bylaws of the Borrower,
or with respect to the Borrower, any applicable law or administrative rule or regulation,
or any applicable court or administrative decree or order, or any material indenture,
mortgage, deed of trust, loan agreement, lease, contract or other material agreement or
instrument to which the Borrower is a party or by which it or its properties are otherwise
subject or bound, or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the property or assets of the
Borrower, other than Permitted Encumbrances, which conflict, violation, breach, default,
lien, charge or encumbrance may materially and adversely affect the consummation of
the transactions contemplated by the Loan Documents, or the financial condition,
operations or business of the Borrower.
(e) As of the date hereof, no consent or approval of any trustee or holder of
any indebtedness of the Borrower or any guarantor of indebtedness of or other provider
of credit or liquidity to the Borrower, and with respect to the Borrower, no consent,
permission, authorization, order or license of, or filing or registration with, any
governmental authority (except with respect to any state securities or “blue sky” laws) is
necessary in connection with the execution and delivery of the Loan Documents, or the
consummation of any transaction herein or therein contemplated, or the fulfillment of or
compliance with the terms and conditions hereof or thereof, except as have been obtained
or made and as are in full force and effect.
(f) There is no action, suit, proceeding, inquiry or investigation, before or by
any court or federal, state, municipal or other governmental authority, pending or, to the
knowledge of the Borrower, after reasonable investigation, threatened, against or
affecting the Borrower or the financial condition, operations or business of the Borrower:
19
(i) to restrain or enjoin the issuance or delivery of any of the Loan
Documents or the payment of Payments or Additional Payments hereunder;
(ii) in any way contesting or adversely affecting the authority for or
the validity of the Loan Documents;
(iii) in any way contesting the corporate existence or powers of the
Borrower;
(iv) which, if determined adversely to it, would materially adversely
affect the consummation of the transactions contemplated by the Loan Documents
or the ability of the Borrower to perform its material obligations hereunder or
thereunder; or could reasonably be expected to have a material adverse effect on
the financial conditions, operations or business of the Borrower; or
(v) contesting the Borrower’s status as an organization described in
Section 501(c)(3) of the Code or which would subject any income of the
Borrower to federal income taxation to such extent as would result in loss of the
exclusion from gross income for federal income tax purposes of interest on any
portion of the Issuer Loan Obligations under Section 103 of the Code.
(g) As of the date hereof, no written information, exhibit or report furnished to
the Issuer or the Lender by the Borrower in connection with the negotiation of the Loan
Documents or otherwise in connection with the transactions contemplated hereby and
thereby, contains any untrue statement of a material fact regarding the Borrower, the
Facilities or the Borrower’s business, or omits to state a material fact regarding the
Borrower, the Facilities or the Borrower’s business necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading. All projections, valuations or pro forma financial statements provided to the
Issuer or the Lender by the Borrower present the Borrower’s good faith opinion as to
such projections, valuations and pro forma condition and results.
(h) The Borrower has heretofore furnished to the Issuer and the Lender the
audited financial statements of the Borrower for its Fiscal Years ended June 30, 2014 and
June 30, 2015, and the related statement of revenues, expenditures, transfer and changes
in net assets and changes in financial position for the Fiscal Years then ended and
information related to the Project. The information relating to the Project is complete and
accurate and those financial statements present fairly, in all material respects, the
financial condition of the Borrower on the dates thereof, and the activities and cash flows
for the periods then ended were prepared in accordance with GAAP. Since June 30,
2015, there has been no material adverse change in the assets, operations or financial
condition of the Borrower that could reasonably be expected to have a Material Adverse
Effect .
(i) The Borrower has good and marketable fee title to the Property and the
Facilities located thereon, in each case free and clear from all encumbrances other than
20
Permitted Encumbrances. The Borrower enjoys the peaceable and undisturbed
possession of all real and personal property which is material to its operation.
(j) The Borrower is not in default (and no event has occurred and is
continuing which with the giving of notice or the passage of time or both could constitute
a default) (1) under the Borrower Documents, or (2) with respect to any order or decree
of any court binding against the Borrower or any order, regulation or demand of any
federal, state, municipal or other governmental authority binding against the Borrower,
which default could reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated by the Borrower Documents, or the
financial condition, operations or business of the Borrower.
All material certificates, approvals, permits and authorizations of applicable local governmental
agencies, and agencies of the State and the federal government were obtained, or will be
obtained during the course of construction of the Project, with respect to the construction and
installation of the Improvements and operation of the Facilities, and the Facilities have been or
will be constructed, installed operated pursuant to and in accordance with such certificates,
approvals, permits and authorizations.
(k) The Borrower acknowledges, represents and warrants that, except for the
express representations and warranties of the Issuer set forth herein, it has not relied on
the Issuer or Lender for any guidance or expertise in analyzing the financial or other
consequences of the transactions contemplated by the Borrower Documents or otherwise
relied on the Issuer or Lender for any advice. The Borrower acknowledges that it has
been advised by, or has had the opportunity to be advised by, its own financial advisors in
connection with the financing and refinancing of the Project.
(l) No portion of the Financed Facilities includes any property used or to be
used for sectarian instruction or study, as a place for devotional activities or religious
worship, or primarily in connection with any part of the program of a school or
department of divinity for any religious denomination.
(m) The Borrower is an organization described in Section 501(c)(3) of the
Code, does not constitute a private foundation under Section 509(a) of the Code, and the
income of the Borrower is exempt from federal taxation under Section 501(a) of the
Code. The Borrower has received a determination from the Internal Revenue Service to
the foregoing effect, and none of the bases for such determination have changed since the
date thereof.
(n) Environmental Laws.
(i) The Borrower is in compliance in all material respects with all
applicable Environmental Laws.
(ii) Neither the Borrower nor the Property is the subject of a federal,
state or local investigation evaluating whether any remedial action is needed to
respond to any alleged violation of or condition regulated by Environmental Laws
or to respond to a release of any Hazardous Materials into the environment.
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(iii) The Borrower does not have any material contingent liability in
connection with any release of any Hazardous Materials into the environment.
(iv) The Borrower is in compliance with Division 13, commencing
with Section 21000, of the Public Resources Code (the “CEQA Requirements”)
with respect to the Project and has received all documentation evidencing such
compliance, or the Project is not defined as a “project” or is “statutorily exempt”
or is “categorically exempt” in accordance with the CEQA Requirements.
(o) Neither the Borrower nor any Affiliate of the Borrower is an “investment
company” or a company “controlled” by an “investment company,” as such terms are
defined in the Investment Company Act of 1940, as amended. The Borrower is not
engaged in the business of extending credit for the purpose of purchasing or carrying
Margin Stock, and no part of the proceeds from the of the Loans will be used to purchase
or carry any such Margin Stock or extend credit to others for the purpose of purchasing or
carrying any such Margin Stock.
(p) Neither the Borrower nor any of its Affiliates is in violation of any laws
relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive
Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive
Order”), and the Patriot Act.
(q) Neither the Borrower nor any of its affiliates is any of the following:
(i) a person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;
(ii) a person owned or controlled by, or acting for or on behalf of, any
person that is listed in the annex to, or is otherwise subject to the provisions of,
the Executive Order;
(iii) a person with which the Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;
(iv) a person that commits, threatens or conspires to commit or
supports “terrorism” as defined in the Executive Order; or
(v) a person that is named as a “specially designated national and
blocked person” on the most current list published by the OFAC or any list of
Persons issued by OFAC pursuant to the Executive Order at its official website or
any replacement website or other replacement official publication of such list;
(r) Neither the Borrower nor any of its Affiliates (i) conducts any business or
engages in making or receiving any contribution of funds, goods or services to or for the
benefit of any person described in subsection (q)(ii) above, (ii) deals in, or otherwise
engages in any transaction relating to, any property or interests in property blocked
pursuant to the Executive Order or (iii) engages in or conspires to engage in any
22
transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts
to violate, any of the prohibitions set forth in any Anti-Terrorism Law.
(s) The Borrower is currently in compliance, and in the future will comply,
with (i) all applicable Laws, including, without limitation all nondiscrimination laws.
(t) Each Plan of the Borrower and each member of the Controlled Group is in
compliance in all material respects with ERISA and other laws to the extent applicable
thereto, and neither the Borrower nor a member of the Controlled Group has received
notice to the contrary from the PBGC or any other Governmental Authority. Neither the
Borrower nor a member of the Controlled Group has any Unfunded Vested Liabilities.
No condition exists or event or transaction has occurred with respect to any Plan which
could reasonably be expected to result in the incurrence by the Borrower or a member of
the Controlled Group of any material liability, fine or penalty. No ERISA Event has
occurred which could reasonably be expected to result in a Material Adverse Effect.
Neither the Borrower nor its Subsidiaries has any contingent liability with respect to any
post-retirement benefits under a Welfare Plan, other than liability for continuation of
coverage described in Part 6 of Title I of ERISA.
(u) The Borrower currently maintains insurance coverage with insurance
companies believed by the Borrower to be capable of performing their obligations under
the respective insurance policies issued by such insurance companies to the Borrower (as
determined in its reasonable discretion) and in full compliance this Loan Agreement.
(v) The representations and warranties of the Borrower contained in the other
Borrower Documents, together with the related definitions of terms contained therein, are
hereby incorporated by reference in this Agreement as if each and every such
representation and warranty and definition were set forth herein in its entirety, and the
representations and warranties made by the Borrower in such Sections are hereby made
for the benefit of the Lender. No amendment to or waiver of such representations and
warranties or definitions made pursuant to the relevant Borrower Document or
incorporated by reference shall be effective to amend such representations and warranties
and definitions as incorporated by reference herein without the prior written consent of
the Lender.
(w) The Borrower has not taken any action or omitted to take any action, and
has no actual knowledge of any action taken or omitted to be taken by any other Person,
which action, if taken or omitted, would adversely affect the exclusion of interest on the
Issuer Loan Obligations from gross income for federal income tax purposes or the
exemption of interest on the Issuer Loan Obligations from State personal income taxes.
(x) None of the Loan Documents provide for any payments that would violate
any applicable law regarding permissible maximum rates of interest.
(y) To the knowledge of the Borrower, there is no amendment or proposed
amendment to the Constitution of the State or any State law or any administrative
interpretation of the Constitution of the State or any State law, or any legislation that has
23
passed either house of the legislature of the State, or any judicial decision interpreting
any of the foregoing, the effect of which will materially adversely affect the transactions
contemplated by this Loan Agreement, the security for any of the obligations owed by the
Borrower hereunder, the creation, organization, or existence of the Borrower or the titles
to office of any officers executing this Agreement or any other Borrower Documents or
the Borrower’s ability to repay when due its obligations under this Loan Agreement.
(z) All material taxes, assessments, fees and other governmental charges
(other than those presently payable without penalty or interest) upon the Borrower or
upon any property thereof, which are due and payable, have been paid and no material
claims are being asserted with respect to any past due taxes, assessments, fees or other
governmental charges against the Borrower, except, in each case, as are being contested
in good faith by appropriate proceedings for which adequate reserves are being
maintained in accordance with GAAP,
(aa) The Borrower has no Subsidiaries or Affiliates.
(bb) The Borrower has not entered into any Swap Agreement relating to any
indebtedness, other than those entered into with the Lender in connection with the
transactions contemplated hereby.
ARTICLE III
ISSUANCE OF LOAN; APPLICATION OF PROCEEDS
Section 3.01. Loan To Refinance the Prior Obligations and Finance the
Improvements.
Subject to the terms and conditions set forth herein, the Lender hereby agrees to loan
$10,443,461.66 in the form of the Series A Issuer Loan Obligation, and up to $13,056,538.34 in
the form of the Series B Issuer Loan Obligation, and the Issuer hereby agrees, subject to
limitations herein, to borrow such amount from the Lender and to lend the Loan Proceeds to the
Borrower for the purposes of refinancing the Prior Obligations and financing the Improvements.
The Loans are non-revolving. Any portion of the Loans repaid may not be relent.
(a) The Borrower shall design, acquire, construct, improve and equip the
Improvements with all reasonable dispatch, substantially in accordance with the Plans and
Specifications. The Borrower shall (a) pay when due all fees, costs and expenses incurred in
connection with the foregoing from funds made available therefor in accordance with this Loan
Agreement, or otherwise, unless any such fees, costs or expenses are being contested by the
Borrower in good faith and by appropriate proceedings; (b) as the Borrower deems reasonably
appropriate and in its best interests, ask, demand, sue for, levy, recover and receive all those
sums of money, debts and other demands whatsoever which may be due, owing and payable
under the terms of any contract, order, receipt, writing and instruction in connection with the
design, construction and equipping of the Improvements; and (c) as the Borrower deems
reasonably appropriate and in its best interests, enforce the provisions of any contract,
agreement, obligation, bond or other performance security with respect thereto. With the prior
24
written consent of the Lender, the Borrower may revise the Plans and Specifications from time to
time, provided that (i) no revision shall be made which would change the purposes of the
Improvements to other than purposes permitted by the Act and (ii) all such revisions shall be
made in accordance with the Project Fund Disbursement Agreement. Upon the completion of
the Improvements, the Borrower shall provide Lender with a Completion Notice.
(b) Upon fulfillment of the conditions precedent set forth in Section 5.01 hereof,
Lender shall disburse the Loan Proceeds of the Series A Issuer Loan Obligation to the Issuer by
applying the proceeds of the Series A Issuer Loan Obligation to the prepayment and
extinguishment of the Prior Obligations.
(c) Subject to the terms and conditions in Sections 4.03 and 5.02 hereof, Lender shall
disburse the Loan Proceeds of the Series B Issuer Loan Obligation to the Issuer from time to
time into the Project Fund pursuant to Draw Requests. The aggregate principal amount of the
Series B Loan outstanding under this Loan Agreement is set forth in Exhibit G hereto, as such
Exhibit G may be amended from time to time pursuant to Section 5.02(b) hereof.
(d) The Issuer’s obligation to repay the Series A Issuer Loan Obligation and the
Borrower’s obligation to repay the Series A Borrower Loan shall commence, and interest shall
begin to accrue, on the Closing Date. The Issuer’s obligation to repay the Series B Issuer Loan
Obligation and the Borrower’s obligation to repay the Series B Borrower Loan shall commence,
and interest shall begin to accrue, on the first date that any of the Loan Proceeds of the Series B
Issuer Loan Obligation are deposited in the Project Fund. The execution and delivery of this
Loan Agreement shall not obligate the Lender to execute and deliver any Draw Request or to
provide any funds with respect to any Draw Request, unless and until such Draw Request and
any related documents have been executed and delivered by all other parties thereto and all
conditions set forth in this Loan Agreement have been satisfied. The parties hereto acknowledge
that the Loans are noteless loans and this Loan Agreement evidences all amounts due to the
Lender pursuant to the terms hereof.
Section 3.02. Establishment and Application of Project Fund.
(a) The Borrower shall establish and maintain an account at MUFG Union
Bank, N.A. designated as the “Project Fund” and designated as account number
3530014036. The Borrower shall maintain a separate record of the Project Fund on its
books and shall account for all deposits and withdrawals from each Project Fund in
accordance with the Borrower’s accounting procedures. The Lender shall deposit a
portion of the Loan Proceeds from the Series B Loan into the Project Fund to be used and
withdrawn by the Borrower pursuant to a Draw Request to pay Project Costs. No
moneys in the Project Fund shall be used to pay Additional Payments.
(b) Other than the disbursement of Loan Proceeds on the Closing Date, the
Lender’s agreement to disburse funds to the Project Fund shall be subject to the further
conditions precedent set forth in Section 5.02 of this Loan Agreement and that the
Borrower shall have met the conditions and requirements set forth in the Project Fund
Disbursement Agreement with respect to disbursement of funds to the Project Fund.
Upon receipt of a Draw Request to pay for Project Costs from the Borrower and the
25
approval thereof by the Lender, the Lender shall disburse to, or for the account of, the
Borrower, Loan Proceeds to pay Project Costs in accordance with the Draw Request.
Each disbursement from the Project Fund to pay Project Costs shall be in an amount not
to exceed sixty percent (60%) of the amount provided for in each Draw Request. The
remaining forty percent (40%) provided for in each Draw Request for payment of Project
Costs shall be paid by utilization of funds of the Borrower.
(c) The Lender shall have the right to retain, at the Borrower’s expense, an
inspector (the “Lender’s Inspector”) to review and advise the Lender with respect to the
Plans and Specifications, construction, architectural and other design professional
contracts, change orders, governmental permits and approvals, and other matters related
to the design, construction, operation and use of the Improvements, to monitor the
progress of construction and to review on behalf of the Lender all Draw Requests
submitted by the Borrower. The Borrower acknowledges that (i) the Lender’s Inspector
has been retained by the Lender to act as a consultant, and only as a consultant, to the
Lender in connection with the construction of the Improvements, and the Lender’s
Inspector may be an employee of the Lender, (ii) the Lender’s Inspector shall in no event
have any power or authority to make any decision or to give any approval or consent or
to do any other thing which is binding upon the Lender, and any such purported decision,
approval, consent or act by the Lender’s Inspector on behalf of the Lender shall be void
and of no force or effect, (iii) the Lender reserves the right to make any and all decisions
required to be made by the Lender under this Loan Agreement, in its sole and absolute
discretion, and without in any instance being bound or limited in any manner whatsoever
by any opinion expressed or not expressed by the Lender’s Inspector to the Lender or any
other person with respect thereto, and (iv) the Lender reserves the right in its sole and
absolute discretion to replace the Lender’s Inspector with another inspector at any time
and without prior notice to or approval by the Borrower. All inspections by or on behalf
of the Lender shall be solely for the benefit of the Lender, and the Borrower shall have no
right to claim any loss or damage against the Lender or the Lender’s Inspector (whether
or not an employee of the Lender) arising from any alleged (i) negligence or failure to
perform such inspections, (ii) failure to monitor loan disbursements or the progress or
quality of construction, or (iii) failure to otherwise properly administer the construction
aspects of the Improvements.
If required by the Lender upon receiving a Draw Request, the Lender’s Inspector
may determine prior to any disbursement of Loan Proceeds by the Lender:
(i) whether the work completed to the date of such Draw Request has
been done satisfactorily and in accordance with the Plans and Specifications;
(ii) the percentage of construction of the Improvements completed as
of the date of such Draw Request;
(iii) the hard construction costs actually incurred by the Borrower in
connection with the construction of the Improvements for work in place as part of
the Improvements as of the date of such Draw Request;
26
(iv) the actual sum necessary to complete construction of the
Improvements in accordance with the Plans and Specifications; and
(v) the amount of time from the date of such Draw Request which will
be required to complete construction of the Improvements in accordance with the
Plans and Specifications.
(d) Upon completion of the Project, the Borrower shall file with the Lender a
Certificate of Completion in the form set forth in Exhibit I hereto. Within 30 days
following completion of the Improvements, the Borrower shall deliver to the Lender a
copy of the certificate of occupancy for the Improvements and a CLTA 101.13
endorsement to the Title Policy.
Section 3.03. Term. The term of this Loan Agreement shall commence on the Closing
Date and shall terminate upon the earliest to occur of any of the following events:
(a) So long as no Event of Default has occurred and is continuing hereunder,
the payment by the Borrower of all Payments and Additional Payments with respect to
the Borrower Loans, any rebate payments and any other payments required to be paid by
the Borrower hereunder;
(b) So long as no Event of Default has occurred and is continuing hereunder,
the prepayment of the entire outstanding principal amount, accrued interest, applicable
Prepayment Fee, any Additional Payments, and the other amounts due hereunder; or
(c) The Lender’s election to terminate this Loan Agreement under Article XI
due to an Event of Default hereunder and the payment of the entire outstanding principal
amount, accrued interest, applicable Prepayment Fee, any Additional Payments, and the
other amounts due hereunder.
Section 3.04. Costs and Expenses of the Issuer. The Borrower shall pay to the Issuer
the following “Issuer Fees and Expenses”:
(a) All taxes and assessments of any type or character charged to the Issuer
affecting the amount available to the Issuer from payments to be received hereunder or in
any way arising due to the transactions contemplated hereby (including taxes and
assessments assessed or levied by any public agency or governmental authority of
whatsoever character having power to levy taxes or assessments) but excluding any taxes
based upon the capital or income of any other person other than the Borrower; provided,
however, that the Borrower shall have the right to protest any such taxes or assessments
and to require the Issuer, at the Borrower’s expense, to protest and contest any such taxes
or assessments assessed or levied upon them and that the Borrower shall have the right to
withhold payment of any such taxes or assessments pending disposition of any such
protest or contest unless such withholding, protest or contest would materially adversely
affect the rights or interests of the Issuer, notwithstanding the provisions of Section 8.01;
(b) The reasonable fees and expenses of such accountants, consultants,
attorneys and other experts as may be engaged by the Issuer to prepare audits, financial
27
statements or opinions or provide such other services and advice as are required in
connection with the Loan Documents and the Loan;
(c) The Issuer Issuance Fee, the Issuer Annual Fees and the reasonable fees
and expenses of the Issuer or any agent or attorney selected by the Issuer to act on its
behalf in connection with the Borrower Loans under this Loan Agreement, the Tax
Regulatory Agreement or any other documents contemplated hereby or thereby,
including, without limitation, any and all reasonable expenses incurred in connection
with any inquiry, investigation, litigation or other proceeding which may at any time be
instituted involving this Loan Agreement, the Tax Regulatory Agreement or any other
documents contemplated hereby or thereby, or in connection with the reasonable
supervision or inspection of the Borrower, its properties, assets or operations or otherwise
in connection with the administration of this Loan Agreement, the Tax Regulatory
Agreement, or any other documents contemplated hereby or thereby; and
(d) Such amounts as may be necessary to satisfy the rebate requirements in
accordance with the Tax Regulatory Agreement and to pay the cost of calculation of such
rebate requirements when required by the Code if the Borrower does not do so directly.
To the extent the Borrower does not satisfy any of the exceptions to rebate, any rebate
calculations must be computed by a third party rebate analyst and may not be computed
solely by the Borrower.
The Issuer Fees and Expenses shall be billed to the Borrower by the Issuer from time to
time, together with supporting documents where appropriate for one or more of the above items.
Amounts so billed shall be paid by the Borrower within 30 days after receipt of the bill by the
Borrower. Notwithstanding the foregoing, the Issuer shall not be required to submit a bill to the
Borrower for payment of the Issuer Annual Fee or any amount due with respect to arbitrage
rebate under Section 148 of the Code, the calculation and payment for which is the responsibility
of the Borrower. The Issuer Issuance Fee shall be paid to the Issuer by the Borrower on the
Closing Date. Thereafter, the Issuer Annual Fee shall be due and payable by the Borrower in
advance on July 1 of each year, commencing with the first such date following the Closing Date.
The Borrower’s obligation to pay the Issuer Issuance Fee and the Issuer Annual Fee shall in no
way limit amounts payable by the Borrower to the Issuer under the Loan Documents, including
the enforcement thereof.
Section 3.05. Limited Obligations of the Issuer. None of the Issuer, its officers, its
employees or any person executing this Loan Agreement on behalf of the Issuer shall be liable
personally on the Issuer Loan Obligations or subject to any personal liability or accountability by
reason of the execution hereof. The Issuer Loan Obligations are a limited obligation of the
Issuer, payable solely from and secured by the pledge of the Payments hereunder. Neither the
Issuer, the members of its Board of Directors, the State of California, nor any of its political
subdivisions shall be directly, indirectly, contingently or morally obligated to use any other
moneys or assets to pay all or any portion of the debt service due on the Issuer Loan Obligations,
to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their
payment. The Issuer Loan Obligations are not a pledge of the faith and credit of the Issuer, the
State of California or any of its political subdivisions nor do they constitute indebtedness within
the meaning of any constitutional or statutory debt limitation. The Issuer has no taxing power.
28
The Issuer shall not be liable for payment of the principal of, Prepayment Fee, or interest
on the Issuer Loan Obligations or any other costs, expenses, losses, damages, claims or actions
of any conceivable kind on any conceivable theory, under or by reason of or in connection with
this Loan Agreement or any other documents, except only to the extent amounts are received for
the payment thereof from the Borrower under this Loan Agreement.
Section 3.06. Invalidity of the Borrower Loans. If at any time the Borrower Loans are
declared to be invalid or unenforceable for any reason, the Borrower Loans will be deemed to be
direct loans from the Lender to the Borrower. All references herein to “Borrower Loans” and
“Issuer Loan Obligations” shall instead refer to the “Loans,” direct loans from the Lender to the
Borrower. In such an event, the Lender and the Borrower acknowledge that the interest
payments with respect to the Loans shall not be excluded from gross income for federal income
tax purposes or State of California income taxation and that the Loans shall bear interest at the
Taxable Equivalent Rate, except as otherwise provided for herein.
ARTICLE IV
REPAYMENT OF THE LOANS
Section 4.01. Interest.
(a) The principal amount of the Loans hereunder outstanding from time to
time shall bear interest (computed on the basis of a 360-day year and actual number of
days elapsed) at the Applicable Loan Rate, subject to terms set forth herein. The Lender
shall determine the Applicable Loan Rate on each Computation Date, and such rate shall
become effective on the Reset Date next succeeding the Computation Date and interest at
such rate shall accrue each day during such Interest Period, commencing on and
including the first day of such period to and including the last day of such period. The
Applicable Loan Rate shall be rounded upward to the fifth decimal place. Interest
accruing on the aggregate principal balance of the Loans from the Closing Date to the
Maturity Date or earlier prepayment as provided herein, and shall be payable monthly by
the Borrower in arrears on the first Business Day of each month and upon earlier demand
in accordance with the terms hereof or prepayment in accordance with Section 4.08
hereof.
(b) Upon the occurrence of a Determination of Taxability, the Borrower shall
pay to the Lender, as assignee of the Issuer, future interest payments calculated at the
Taxable Equivalent Rate as such Payments become due. In addition, the Borrower
hereby agrees to pay the Lender on demand therefor (1) an amount equal to the difference
between (A) the amount of interest that would have been paid to Lender hereunder during
the period for which interest on the Loans is included in the gross income of the Lender if
the Loans had borne interest at the Taxable Equivalent Rate, beginning on the Taxable
Date (the “Taxable Period”), and (B) the amount of interest actually paid to the Lender
during the Taxable Period, and (2) an amount equal to any interest, penalties or charges
owed by the Lender as a result of interest of the Loans becoming included in the gross
income of the Lender, together with any and all attorneys’ fees, court costs, or other
out-of-pocket costs incurred by the Lender in connection therewith The Lender
29
acknowledges that payments at the Taxable Equivalent Rate may be amounts that are not
excluded from gross income for federal income tax purposes pursuant to Section 103 of
the Code.
(c) (i) If the amount of interest payable for any period in accordance with
the terms hereof exceeds the amount of interest that would be payable for such
period had interest for such period been calculated at the maximum rate of interest
permitted by applicable law, then interest for such period shall be payable in an
amount calculated at the maximum rate of interest permitted by applicable law.
(ii) Any interest that would have been due and payable for any period
but for the operation of the immediately preceding subclause (i) shall accrue and
be payable as provided in this subclause (ii) and shall, less interest actually paid to
the Lender for such period, constitute the “Excess Interest Amount.” If there is
any accrued and unpaid Excess Interest Amount as of any date, then the principal
amount with respect to which interest is payable shall bear interest at the
maximum rate of interest permitted by applicable law until payment to the Lender
of the entire Excess Interest Amount.
(iii) Notwithstanding the foregoing, on the date on which no principal
amount with respect to the Loans remains unpaid, the Borrower shall pay to the
Lender a fee equal to any accrued and unpaid Excess Interest Amount.
Section 4.02. Payments. The Issuer shall pay the principal of, Prepayment Fee, if any,
and interest on the Issuer Loan Obligations, but only out of Payments made to the Issuer by the
Borrower therefor. The Borrower shall pay to the Lender, as assignee of the Issuer, Payments in
the amounts and at such times as set forth in Section 4.01, Section 4.08 and Section 4.10 hereof.
Section 4.03. Draws. Until October 31, 2017, the Borrower and the Lender, without the
consent of the Issuer, may from time to time, but no more often than once per calendar month,
increase the amount of the Series B Loan outstanding by executing Draw Requests substantially
in the form set forth in Exhibit F hereto in accordance with Sections 5.02 and the Project Fund
Disbursement Agreement. Each Draw Request shall reasonably identify the Project Costs that
will be paid with (or for which the Borrower will be reimbursed by) such Draw Request. Draw
Requests shall be numbered consecutively beginning with “1.” No single Draw Request may
provide for an advance of less than $100,000 (other than the initial and the final Draw Requests,
which may be for a lesser amount). The maximum aggregate amount of the Series B Loan
provided for in all Draw Requests shall not exceed $13,056,538.34. In the event the aggregate
amount of all Draw Requests submitted and approved hereunder on October 31, 2017 is less than
the maximum aggregate amount of the Series B Loan, the Lender may, in its sole discretion,
transfer the undrawn balance of the Series B Loan into the Project Fund for disbursement for
Project Costs in compliance with the terms of the Project Fund Disbursement Agreement. The
proceeds of the Series B Loan deposited into the Project Fund shall be disbursed for Project
Costs no later than the third anniversary of the Closing Date.
Section 4.04. Security for the Loan. As security for the repayment of the Issuer Loan
Obligations, the Issuer hereby assigns to the Lender all of its right, title and interest in this Loan
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Agreement except for Reserved Issuer Rights, including the Issuer’s rights to receive Payments
with respect to the Borrower Loans (and hereby directs the Borrower to make such Payments
directly to, or at the direction of, the Lender), to collect the Payments and any other payments
due to the Issuer hereunder the receipt of which is not part of Reserved Issuer Rights, and to sue
in any court for such Payments or other payments, to exercise all rights hereunder with respect to
the Project, and to withdraw or settle any claims, suits or proceedings pertaining to or arising out
of this Loan Agreement and any other Borrower Loans upon any terms (other than any claims
related to Reserved Issuer Rights). Such assignment by the Issuer to the Lender shall be an
absolute assignment without recourse to the Issuer. Such Payments and other payments the
receipt of which is not part of Reserved Issuer Rights shall be made by the Borrower directly to
the Lender, as the Issuer’s assignee, without the requirement of notice or demand, at the address
provided in Section 12.04 hereof, or such other place as the Lender may from time to time
designate in writing, and shall be credited against the Issuer’s payment obligations under the
related the Issuer Loan Obligations. No provision, covenant or agreement contained in this Loan
Agreement or any obligation herein or therein imposed on the Issuer, or the breach thereof, shall
constitute or give rise to or impose upon the Issuer a pecuniary liability, a charge upon its general
credit or a pledge of its revenues. In making the agreements, provisions and covenants set forth
in this Loan Agreement, the Issuer has not obligated itself except with respect to the application
of the Payments to be paid by the Borrower hereunder and thereunder. All amounts required to
be paid by the Borrower hereunder shall be paid in lawful money of the United States of
America in immediately available funds. No recourse shall be had by the Lender or the
Borrower for any claim based on this Loan Agreement against any director, officer, employee or
agent of the Issuer alleging personal liability on the part of such person.
To further secure its Obligations and to perform and observe the covenants and
agreements contained herein and in the Borrower Documents, the Borrower hereby pledges to
and grants to the Issuer, and the Issuer hereby assigns to the Lender, a first priority lien and
security interest, within the meaning of the California Uniform Commercial Code and to the
extent permitted by law in all of its right, title and interest, if any, in the Project Fund (the
“Project Fund Collateral”). The Borrower agrees to execute and authorizes the Lender to file
such notices of assignment, chattel mortgages, financing statements and other documents, in
form satisfactory to the Lender, which the Lender deems necessary or appropriate to establish
and maintain the Lender’s first priority security interest in the Project Fund Collateral, including
proceeds thereof.
Section 4.05. Deed of Trust.
(a) The Borrower shall, at its expense, record, or cause the recordation of, the
Deed of Trust and all amendments thereto in the Official Records of the Office of the
County Clerk of San Diego County, California. Within 10 days after request for any
confirmation of any filing required by this Section, the Borrower shall deliver to Lender,
as assignee of the Issuer, the signed documents requested or evidence satisfactory to
Lender to the effect that such filing has been duly accomplished. The Borrower hereby
authorizes Lender to file such financing statements (and all amendments or continuations
thereto) as may be necessary to perfect Lender’s security in a form satisfactory to Lender
and the Borrower shall, at Lender’s written request, provide to Lender, within 60 days of
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the date of delivery of this Loan Agreement, a UCC-1 search certificate with respect to
the Borrower.
(b) The Issuer, the Borrower and Lender agree that the Deed of Trust and
UCC-1 financing statement may be amended or terminated at any time with the prior
written consent of Lender. The consent of the Issuer shall not be required for any such
amendment or termination.
(c) As additional security for the Issuer Loan Obligations, the Issuer has made
a complete assignment to Lender of all of the Issuer’s rights, title interest and obligations
in, to and under the Deed of Trust, pursuant to the Assignment Agreement. The Borrower
hereby consents to such assignment, as well as the assignment by the Issuer set forth in
Section 4.04 above.
Section 4.06. Payment on Non Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, such payment may be
made on the next succeeding Business Day.
Section 4.07. Borrower Payments to Be Unconditional. The obligations of the
Borrower to make Payments required under this Loan Agreement and to make other payments
hereunder and thereunder and to perform and observe the covenants and agreements contained
herein and therein shall be absolute and unconditional in all events, without abatement,
diminution, deduction, setoff or defense for any reason, including (without limitation) any failure
of the Project, the Facilities or any Improvement to be delivered or installed, any defects,
malfunctions, breakdowns or infirmities in the Facilities or the Improvements or any accident,
condemnation, destruction or unforeseen circumstances. Notwithstanding any dispute between
the Borrower and any of the Issuer, the Lender or any other person, the Borrower shall make all
Payments when due and shall not withhold any Payments pending final resolution of such
dispute, nor shall the Borrower assert any right of setoff or counterclaim against its obligation to
make such payments required under this Loan Agreement.
Section 4.08. Prepayments.
(a) The Issuer shall prepay the Series A Issuer Loan Obligation and the Series
B Issuer Loan Obligation solely to the extent that the Borrower shall prepay the Series A
Borrower Loan and the Series B Borrower Loan, respectively, and the Borrower may
prepay the Series A Borrower Loan and the Series B Borrower Loan in whole or in part,
on any date, in advance of the required Payments set forth in Section 4.10 hereof, by
paying the outstanding principal amount of the Borrower Loans (or the portion thereof
being prepaid), any applicable Prepayment Fee, accrued interest to the prepayment date,
and any outstanding and unpaid Additional Payments due under this Loan Agreement;
provided, however, that after any partial prepayment, the remaining outstanding principal
amount of the Borrower Loans shall not be less than $100,000. The Borrower shall
provide the Lender written notice of any such prepayment at least 30 days in advance
thereof, and shall specify if the prepayment applies to the Series A Borrower Loan or the
Series B Borrower Loan. Upon any prepayment in part of the Series A Borrower Loan or
the Series B Borrower Loan, the prepayment shall be applied first to interest accrued
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thereon, the applicable Prepayment Fee, and any outstanding and unpaid Additional
Payments, and next to the principal component of the Series A Borrower Loan or the
Series B Borrower Loan, as applicable, in the inverse order of date due.
(b) The Issuer shall prepay the Series A Issuer Loan Obligation and the Series
B Issuer Loan Obligation solely to the extent that the Borrower shall prepay the Series A
Borrower Loan and the Series B Borrower Loan, respectively, and the Borrower may
prepay the Series A Borrower Loan and the Series B Borrower Loan in whole or in part,
on any date from insurance or condemnation proceeds pursuant to Article IX hereof by
paying some or all of the outstanding principal amount of the Series A Borrower Loan
and the Series B Borrower Loan, accrued interest on the Series A Borrower Loan and the
Series B Borrower Loan to the prepayment date, and any outstanding and unpaid
Additional Payments due under this Loan Agreement.
(c) The Issuer shall prepay the Series A Issuer Loan Obligation and the Series
B Issuer Loan Obligation solely to the extent that the Borrower shall prepay the Series A
Borrower Loan and the Series B Borrower Loan, respectively, and the Borrower shall
prepay the Borrower Loans in full immediately upon demand therefor of the Lender to
the Issuer after the occurrence of an Event of Default by paying the outstanding principal
amount of the Loan, accrued interest to the prepayment date, and any outstanding and
unpaid Additional Payments due under this Loan Agreement.
(d) The Issuer shall prepay the Issuer Loan Obligations solely to the extent
that the Borrower shall prepay the Borrower Loans in full immediately and the Borrower
shall prepay the Borrower Loans in full immediately upon demand of the Issuer after the
occurrence of a Determination of Taxability by paying the outstanding principal amount
of the Loan, interest at the Taxable Equivalent Rate to the date of prepayment as required
by Section 4.01(b), and any outstanding and unpaid Additional Payments due under this
Loan Agreement, plus an amount necessary to supplement the Prior Interest Payments to
the Gross-Up Rate pursuant to Section 4.01(b).
(e) On the Prepayment Date, the Issuer shall, to the extent funds are received
from the Borrower, prepay the Issuer Loan Obligations in full and the Borrower shall
prepay the Borrower Loans in full, together with all unpaid and accrued interest on the
Borrower Loans to the Prepayment Date, any Additional Payments then due in
accordance with this Loan Agreement and all other amounts payable in accordance with
this Loan Agreement. Unless the Lender agrees to an extension as set forth below or as
otherwise agreed by the Borrower and the Lender in writing, the Loans shall be prepaid
in full on the related Prepayment Date and any failure to make any such prepayment shall
constitute an Event of Default hereunder. Not later than 90 days prior to the Prepayment
Date, the Borrower may in writing request an extension of the Loans to a date up to and
including November 1, 2047. The Lender shall, not later than 60 days following receipt
of the Borrower’s written request for an extension, provide a written response to the
Borrower indicating whether the Lender has approved such extension. If the Lender
approves the extension, the Market Agent shall determine the Applicable Spread for such
extension period (which shall be consented to by the Borrower and the Lender) such that
the Applicable Loan Rate shall be the interest rate per annum (based upon tax exempt
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obligations comparable, in the judgment of the Market Agent, to the Loans and known to
the Market Agent to have been priced or traded under the prevailing market conditions)
to be the minimum interest rate at which a person will agree to advance the Loans on the
Prepayment Date at a price (without regard to accrued interest) equal to the principal
amount thereof. Concurrently with the determination of the new Applicable Loan Rate
by the Market Agent, the Market Agent shall provide the Borrower and the Lender
amended Exhibits D-1 and D-2. Any failure of Lender to respond to any such request or
if the Borrower and the Lender cannot agree to the Applicable Loan Rate, it shall be
construed as a denial of the request. If the new Applicable Spread is not acceptable to the
Borrower or the Lender, the Borrower shall prepay the Loans on the Prepayment Date.
In connection with the extension of the Prepayment Date of the Loans, the Borrower shall
cause to be delivered to the Issuer a notice of such extension and the new Applicable
Loan Rate and amended Exhibits D-1 and D-2, and to the Issuer and Lender an opinion
of Special Counsel that such extension will not, in and of itself, adversely affect the
exclusion of the interest on the Issuer Loan Obligations from the gross income of the
recipients thereof for purposes of federal income taxation. The Lender, the Issuer and the
Borrower shall enter into an amendment to this Loan Agreement to reflect the terms of
any extension of the Prepayment Date of the Loans pursuant to this Section.
(f) In connection with the determination of the Prepayment Fee, if any,
pursuant to this Section 4.08, in no event shall the Lender be obligated to make any
payment or refund to the Borrower, nor shall the Borrower be entitled to any setoff or
other claim against the Lender, should the return which the Lender could obtain under
this prepayment formula exceed the interest that the Lender would have received if no
prepayment had occurred. The Lender shall provide the Borrower a statement setting
forth the computation of the Prepayment Fee in reasonable detail and such statement shall
be conclusive if reasonably determined. A determination by the Lender as to the
Prepayment Fee amount, if any, shall be conclusive.
Section 4.09. Restrictions on Transfer of Loans. Notwithstanding any other provision
hereof, the Borrower Loans are nontransferable, except in connection with the transfer of the
Issuer Loan Obligations. The Issuer Loan Obligations may be transferred, assigned and
reassigned in whole (but not in part) by the Lender without the consent of the Issuer or the
Borrower, upon 30 days prior written notice to the Borrower, to an Affiliate or a Qualified
Institutional Buyer but only in accordance with the requirements of this Section 4.09. For
purposes of the foregoing sentence, a change of control of the Lender or a sale of substantially all
of the Lender’s assets or equity shall not be deemed to be a transfer or assignment of the Issuer
Loan Obligations. In the event of a sale or transfer to an Affiliate, the Lender shall certify to the
Issuer and the Borrower that such transferee is an Affiliate. In the event of a sale, transfer,
assignment or participation by the Lender of the Issuer Loan Obligations to a Qualified
Institutional Buyer that is not an Affiliate of the Lender, the Lender shall, prior to any such
transfer, provide or cause to be provided to the Issuer and the Borrower an investor letter
executed by such purchaser, transferee or participant in the form of Exhibit B hereto which shall
contain a certification that the purchaser, transferee or participant is a Qualified Institutional
Buyer as provided in this Loan Agreement. The provisions of the investor letter may not be
revised without the prior written consent of the Issuer. In addition, Lender will provide to the
Borrower an Assignment Letter, in the form of Exhibit E hereto, when such assignment is to an
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Affiliate, and the Borrower shall acknowledge such assignment. Upon assignment, the Borrower
will reflect in a book entry the assignee designated in the written request of assignment or in a
written certification of an Affiliate delivered to the Issuer and the Borrower pursuant to this
Section, and shall agree to make all payments to the assignee designated in such written request,
notwithstanding any claim, defense, setoff or counterclaim whatsoever (whether arising from a
breach of this Loan Agreement or otherwise) that the Issuer and the Borrower may from time to
time have against the Lender or the assignee. The Issuer agrees to execute all documents,
including notices of assignment, which may be reasonably requested by the Lender or its
assignee to protect their interest in the Project and in this Loan Agreement. The Lender or
assignee shall pay all reasonable expenses of the Issuer and the Borrower, including reasonable
fees and expenses of counsel (including those of the California Department of Justice attorneys
when they represent the Issuer), in connection with such transfer and assignment and the
execution of any documents in connection therewith. Any transfers of interest in the Issuer Loan
Obligations shall only be made pursuant to an entry in a registration book by the Borrower
pursuant to this Section, as required by Section 149 of the Code. Upon the Lender’s transfer or
assignment of the Issuer Loan Obligations, the Lender shall have no further obligation and shall
be released from all liability for any act or omission occurring subsequent to the date of such
transfer or assignment.
Notwithstanding anything to the contrary contained in this Section 4.09, the Lender may
at any time pledge or grant a security interest in all or any portion of its rights under the Loans
and this Loan Agreement to secure obligations of the Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release the Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for the Lender as a party hereto.
Section 4.10. Repayment of Principal. The Borrower shall make payments of principal
with respect to the Series A Borrower Loan in accordance with the repayment scheduled attached
hereto as Exhibit D-1. The Borrower shall make payments of interest only with respect to the
Series B Borrower Loan during the Interest-Only Period, and a final payment of interest only on
the first Business Day of the calendar month immediately following the Interest-Only Period.
Payments of principal with respect to the Series B Borrower Loan shall be payable on the dates
and in the amounts set forth on Exhibit D-2 hereto.
Section 4.11. Loan Fee. The Borrower shall pay to the Lender on the Closing Date, a
fee in the amount equal to $58,750.
Section 4.12. Late Charge. If the Borrower fails to make any Payment and such failure
results in the untimely payment of principal and interest on the Loan, or if the Borrower fails to
make any Additional Payment when due, in each case, taking into account any grace period
allowed for such Payment, the Borrower shall pay to the Lender or the Issuer a late charge equal
to 10% of the past due payment.
Section 4.13. Default Rate. If (a) the Borrower shall fail to pay the principal and
accrued interest on the Borrower Loans when the same shall become due under this Loan
Agreement, or (b) an Event of Default shall occur hereunder or under any other Loan
Documents, then the Applicable Loan Rate hereunder shall increase to the Default Rate. All
35
amounts not paid when due under this Loan Agreement (subject to any applicable grace periods)
shall be added to the unpaid principal amount hereunder and shall bear interest at the Default
Rate until such time as the payment default is cured.
Section 4.14. Increased Costs.
(a) (i) Increased Costs Generally. If any Change in Law shall:
(A) impose, modify or deem applicable any reserve, liquidity
ratio, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or
advances, loans or other credit extended or participated in by, the Lender;
(B) subject the Lender to any Tax of any kind whatsoever with
respect to this Loan Agreement, or change the basis of taxation of
payments to the Lender in respect thereof (except for Indemnified Taxes
or Other Taxes covered by Section 4.16 hereof and the imposition of, or
any change in the rate of any Excluded Tax payable by the Lender); or
(C) impose on the Lender any other condition, cost or expense
affecting this Loan Agreement or any other Loan Document;
and the result of any of the foregoing shall be to increase the cost to the Lender related to
extending the Loans or of maintaining its obligation to make the Loans, or to reduce the amount
of any sum received or receivable by the Lender hereunder (whether of principal, interest or any
other amount) then, upon written request of the Lender, the Borrower shall promptly pay to the
Lender such additional amount or amounts as will compensate the Lender for such additional
costs incurred or reduction suffered.
(ii) Capital Requirements. If the Lender determines that any Change
in Law affecting the Lender or the Lender’s parent or holding company, if any,
regarding capital requirements, has or would have the effect of reducing the rate
of return on the Lender’s or the Lender’s parent or holding company holding, if
any, as a consequence of this Loan Agreement, or making or committing to make
the Loans to a level below that which the Lender or the Lender’s parent or
holding company could have achieved but for such Change in Law (taking into
consideration the Lender’s policies and the policies of the Lender’s parent or
holding company with respect to capital adequacy), then from time to time upon
written request of the Lender, the Borrower shall promptly pay to the Lender such
additional amount or amounts as will compensate the Lender or the Lender’s
parent or holding company for any such reduction suffered.
(iii) Certificates for Reimbursement. A certificate of the Lender setting
forth the amount or amounts necessary to compensate the Lender or the Lender’s
parent or holding company, as the case may be, as specified in paragraph (i) or (ii)
of this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay the Lender or any such Participant, as the
36
case may be, the amount shown as due on any such certificate within thirty (30)
days after receipt thereof.
(iv) Delay in Requests; Survival. Failure or delay on the part of the
Lender to demand compensation pursuant to this Section shall not constitute a
waiver of the Lender’s or any such Participant’s right to demand such
compensation. Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section shall survive the termination of this Loan Agreement and the payment
in full of the Loans.
Section 4.15. Net of Taxes, Etc.
(a) Any and all payments to the Lender hereunder or with respect to the Loans
shall be made free and clear of and without deduction or withholding for any and all
Indemnified Taxes. If the Borrower shall be required by law to deduct or withhold any
Indemnified Taxes imposed by the United States of America or any political subdivision
thereof from or in respect of any sum payable hereunder or with respect to the Loans,
then (i) the sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable under
this Section) the Lender receives an amount equal to the sum it would have received had
no such deductions been made, (ii)the Borrower shall make such deductions and (iii)the
Borrower shall timely pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law. If the Borrower shall make any
payment under this Section to or for the benefit of the Lender with respect to Indemnified
Taxes and if the Lender shall claim any credit or deduction for such Indemnified Taxes
against any other taxes payable by the Lender to any taxing jurisdiction in the United
States of America then the Lender shall pay to the Borrower an amount equal to the
amount by which such other taxes are actually reduced; provided, that the aggregate
amount payable by the Lender pursuant to this sentence shall not exceed the aggregate
amount previously paid by the Borrower with respect to such Indemnified Taxes. In
addition, the Borrower agrees to pay any present or future stamp, recording or
documentary taxes and any other excise or property taxes, charges or similar levies that
arise under the laws of the United States of America or any state of the United States
from any payment made hereunder or under the Loans or from the execution or delivery
of this Agreement or the Loans, or otherwise with respect to this Agreement or the Loans
(hereinafter referred to as “Other Taxes”). The Lender shall provide to the Borrower
within a reasonable time a copy of any written notification it receives with respect to
Indemnified Taxes or Other Taxes owing by the Borrower to the Lender hereunder;
provided, that the Lender’s failure to send such notice shall not relieve the Borrower of
its obligation to pay such amounts hereunder.
(b) The Borrower shall, to the fullest extent permitted by law and subject to
the provisions hereof, pay the Lender for the full amount of Indemnified Taxes and Other
Taxes including any Indemnified Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section paid by the Lender or any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto, whether or not
37
such Indemnified Taxes or Other Taxes were correctly or legally asserted; provided, that
the Borrower shall not be obligated to pay the Lender for any penalties, interest or
expenses relating to Indemnified Taxes or Other Taxes arising from the Lender’s gross
negligence or willful misconduct. The Lender agrees to give notice to the Borrower of
the assertion of any claim against the Lender relating to such Indemnified Taxes or Other
Taxes as promptly as is practicable after being notified of such assertion; provided, that
the Lender’s failure to notify the Borrower promptly of such assertion shall not relieve
the Borrower of its obligation under this Section. Payments by the Borrower pursuant to
this Section shall be made within thirty (30) days from the date the Lender makes written
demand therefor, which demand shall be accompanied by a certificate describing in
reasonable detail the basis thereof. The Lender agrees to repay to the Borrower any
refund (including that portion of any interest that was included as part of such refund)
with respect to Indemnified Taxes or Other Taxes paid by the Borrower pursuant to this
Section received by the Lender for Indemnified Taxes or Other Taxes that were paid by
the Borrower pursuant to this Section and to contest, with the cooperation and at the
expense of the Borrower, any such Indemnified Taxes or Other Taxes which the Lender
or the Borrower reasonably believes not to have been properly assessed.
(c) Within thirty (30) days after the date of any payment of Indemnified Taxes
by the Borrower, the Borrower shall furnish to the Lender the original or a certified copy
of a receipt evidencing payment thereof.
(d) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this Section shall
survive the termination of this Loan Agreement and the payment in full of the Loans.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01. Conditions Precedent to Loan Agreement. The Issuer’s agreement to
enter into this Loan Agreement and provide the financing contemplated hereby shall be subject
to the condition precedent that the Issuer shall have received or waived the requirement for the
items listed in Section 5.01(a), (b), (c), (d), (g), (h), (i), (j), (m), (q), (s), (t), (v), (x) and (z), each
in form and substance satisfactory to the Issuer. The Lender’s agreement to enter into this Loan
Agreement and provide the financing contemplated hereby shall be subject to the condition
precedent that the Lender shall have received or waived the requirement for, all of the following,
each in form and substance satisfactory to the Lender:
(a) this Loan Agreement, properly executed on behalf of the Issuer, the
Borrower and the Lender, and, if applicable, each of the Exhibits hereto properly
completed;
(b) the Tax Regulatory Agreement, properly executed on behalf of the
Borrower and the Issuer;
(c) the Assignment Agreement;
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(d) the Deed of Trust, properly executed on behalf of the Borrower and
notarized;
(e) Reserved;
(f) the Contracts and Permits Assignment Agreements;
(g) the Project Fund Disbursement Agreement;
(h) the Construction Contract fully executed by General Contractor and the
Borrower, in form and substance satisfactory to Lender;
(i) the Final Appraisal of the Property evidencing that the loan-to-value ratio,
based on the “as-completed” fair market value of the Property that will secure the
Borrower Loans as set forth in the Final Appraisal, is no greater than 65%;
(j) a certificate of the Borrower, certifying as to (i) the resolutions of the
Board of Directors or Executive Committee, if so authorized by the Board of Directors,
of the Borrower, authorizing the execution, delivery and performance of the Borrower
Documents and any related documents, (ii) the Bylaws of the Borrower, (iii) the
signatures of the officers or agents of the Borrower authorized to execute and deliver the
Borrower Documents and other instruments, agreements and certificates on behalf of the
Borrower, (iv) that there has been no event or circumstance since June 30, 2015, that has
had or could be reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect, (v) that the representations and warranties contained in Section
2.02 hereof and the other Loan Documents are true and correct in all material respects on
the Closing Date and (vi) no event has occurred and is continuing, or would result from
entry into this Agreement, which would constitute a Default or Event of Default;
(k) copies of the Articles of Incorporation of the Borrower, certified within 30
days of the Closing Date;
(l) a certificate of good standing issued as to the Borrower by the Secretary of
State of the State dated not more than thirty (30) days prior to the Closing Date;
(m) a certificate of good standing or exemption issued as to the Borrower by
the Franchise Tax Board of the State dated not more than thirty (30) days prior to the
Closing Date;
(n) a resolution adopted by the Issuer authorizing the Borrower Loans and the
Issuer Loan Obligations and the transactions contemplated hereunder;
(o) a closing certificate of the Issuer in a form reasonably acceptable to
Special Counsel;
(p) evidence that the financing of the Project has been approved by the
“applicable elected representative” of the TEFRA governmental approver after a public
hearing held upon reasonable notice;
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(q) UCC-1 financing statement(s) as required by the Lender to perfect the
security interests of the Issuer and assignment to the Lender;
(r) current searches of appropriate filing offices showing that (i) no state or
federal tax liens have been filed and remain in effect against the Borrower, (ii) no
financing statements have been filed and remain in effect against the Borrower relating to
the Project except those financing statements filed by the Lender, or financing statements
which will be terminated upon closing of the financing contemplated hereunder, and
(iii) the Lender has duly filed all financing statements necessary to perfect the security
interest created pursuant to this Loan Agreement to the extent such interest can be
perfected by filing a financing statement;
(s) a completed and executed Form 8038 or evidence of filing thereof with the
Secretary of Treasury;
(t) an opinion of counsel to the Borrower, addressed to Kutak Rock LLP, as
Special Counsel, the Lender and the Issuer, in form and substance acceptable to the
Lender and the Issuer and addressing the matters described in Exhibit C hereto;
(u) an opinion of counsel to the Issuer, addressed to the Issuer and the Lender,
in form and substance acceptable to the Lender and the Issuer;
(v) an opinion of Special Counsel addressed to the Issuer and Lender, in form
and substance acceptable to the Issuer and Lender;
(w) evidence of payment of the Issuer’s closing fees and the fees of the
Issuer’s counsel;
(x) evidence of payment to the Lender of the Lender’s costs and expenses in
connection with the execution of the Loan Documents;
(y) an investor letter of representations executed by the Lender, in the form
attached hereto as Exhibit B and such other certificates of the Lender reasonably
requested by Lender’s Counsel and counsel to the Issuer;
(z) certificates of the insurance required under Section 7.04 of this Loan
Agreement containing a lender’s loss payable clause or endorsement in favor of the
Lender;
(aa) evidence satisfactory to the Issuer that the Borrower has retained the
services of a rebate consultant for purposes of compliance with certain requirements of
the Tax Regulatory Agreement;
(bb) a Docket Search of the Superior Court in the County of San Diego and the
United States District Court for the Southern District of California;
(cc) a commitment from the Title Insurer to issue the Title Policy;
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(dd) any other documents or items reasonably required by the Lender or the
Issuer;
(ee) the Lender shall have received a report as to whether or not any portion of
the real property is in a federally designated flood hazard area and, if any improvements
thereon are in a federally designated flood hazard area, evidence of the maintenance of
flood insurance as may be required by applicable law;
(ff) the Lender shall have received a report of an independent firm of
environmental engineers acceptable to the Lender concerning the environmental hazards
and matters with respect to the parcels of real property subject to the Lien of the Deed of
Trust, together with a reliance letter thereon acceptable to the Lender;
(gg) a copy of the Borrower’s Investment Policy as in effect on the Closing
Date; and
(hh) the Lender shall have received (i) the audited financial statements of the
Borrower for Fiscal Year ended June 30, 2015, together with internally prepared financial
statements for each quarter(s) ended since the end of such Fiscal Year and (ii)
information relating to the Capital Campaign Contributions.
Section 5.02. Conditions Precedent to Subsequent Draw Requests. Other than the
initial disbursement of Loan Proceeds on the Closing Date and subject to Section 5.03 hereof,
Lender’s agreement to disburse the Loan Proceeds shall be subject to the further conditions
precedent set forth in the Project Fund Disbursement Agreement and that Lender shall have
received or waived the requirement for all of the following for each Draw Request, each in form
and substance satisfactory to Lender:
(a) a fully executed Draw Request substantially in the form attached hereto as
Exhibit F, with all appropriate supporting documents attached thereto;
(b) an updated Exhibit G to this Loan Agreement, as applicable;
(c) a set of the Plans and Specifications marked “for construction” approved
by the City of San Diego;
(d) the building permit(s) and any other permits, licenses and approvals
(collectively, the “Permits”) that may be required for the commencement of the
construction of the Improvements, in form and substance satisfactory to Lender;
(e) copies of fully executed applications for payments submitted by the
General Contractor, and at Lender's option, from the “Major Subcontractors” (defined for
purposes of this section and elsewhere herein as subcontractors performing work in
excess of $50,000.00), on AIA Document 702 and 703, with all supporting
documentations required thereby;
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(f) the certification by the Borrower that no Event of Default exists, and, to
the best of its knowledge, no event has occurred and no condition exists that, after notice
or lapse of time, or both, would constitute an Event of Default;
(g) payment of Lender Fees, commissions and expenses required by
Section 12.03 hereof;
(h) the Lender shall be satisfied that the opinion of Special Counsel delivered
on the Closing Date remains in effect and covers the requested draw; and
(i) such other information and documents as Lender may reasonably require
related to such disbursement request.
Section 5.03. Limitations to Disbursement. Notwithstanding anything to the contrary
contained in this Loan Agreement, other than the initial disbursement of Loan Proceeds on the
Closing Date, Lender need not make any further disbursements pursuant to a Draw Request or
allow any withdrawal from the Project Fund at any time if:
(a) the Facilities or Improvements are materially damaged by fire or other
casualty and not fully repaired and restored, unless Lender actually receives insurance
proceeds or a cash deposit from the Borrower sufficient in Lender’s judgment to pay for
the complete repair or replacement of the Improvements in a timely manner;
(b) the Lender reasonably believes that withholding disbursement in whole or
in part is required by applicable mechanics' lien or stop notice laws (unless the Borrower
has obtained a bond reasonably satisfactory to Lender sufficient to allow Lender to make
such disbursement in accordance with California law);
(c) the Borrower has not obtained or is not in compliance with all required
governmental approvals, including without limitation all necessary building permits, or
has not complied with all applicable regulations, laws, ordinances (including without
limitation environmental and subdivision map requirements and conditions of approval)
to permit the construction of the Improvements according to the Plans and Specifications;
(d) the Borrower fails timely to proceed with completion of construction of
the Improvements substantially in accordance with the Plans and Specifications approved
by Lender; or
(e) an Event of Default has occurred under this Loan Agreement, any of the
other Loan Document, any other agreement between the Lender and the Borrower, or the
Borrower is in default under any other agreement regarding the development of the
Facilities or the Improvements, including without limitation, any subdivision agreement,
improvement agreement, or development agreement.
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ARTICLE VI
SECURITY INTEREST
Section 6.01. Change in Name or Corporate Structure of the Borrower; Change in
Location of the Borrower’s Principal Place of Business. The Borrower’s chief executive
office is located at the address set forth in Section 12.04 hereof, and all of the Borrower’s records
relating to its business are kept at such location. The Borrower hereby agrees to provide written
notice to the Lender and the Issuer of any change or proposed change in its name, corporate
structure, state of its incorporation or organization, place of business, chief executive office or
tax identification number. Such notice shall be provided 30 days in advance of the date that such
change or proposed change is planned to take effect.
Section 6.02. Security Interest. The Borrower hereby authorizes the Lender to file any
financing statement (and any amendments or continuations to any financing statement) necessary
to perfect the security interest granted in this Loan Agreement under the laws of the State.
Pursuant to Section 5451 of the Government Code of the State, the pledge of the Payments by
the Issuer for the repayment of the principal of, premium, if any, and interest on the Issuer Loan
Obligations constitutes a first lien and security interest which immediately attaches to such
Payments, and is effective and binding against the Issuer, the Borrower, their successors,
creditors and all others asserting rights therein irrespective of whether those parties have notice
of the pledge, irrespective of whether such amounts are or may be deemed to be a fixture and
without the need for physical delivery, recordation, filing or further act.
Section 6.03. Assignment of Insurance. As additional security for the payment and
performance of the Borrower’s obligations under this Loan Agreement, the Borrower hereby
assigns to the Lender, as assignee of the Issuer, a security interest in any and all moneys
(including, without limitation, proceeds of insurance) due or to become due under, and all other
rights of the Borrower with respect to, any and all policies of insurance now or at any time
hereafter covering the Facilities or the Property or any evidence thereof or any business records
or valuable papers pertaining thereto, and Lender may request that the Borrower direct the issuer
of any such policy to pay all such moneys in excess of $100,000 directly to the Lender for
application in accordance with Article IX. The Borrower hereby assigns to the Lender, as
assignee of the Issuer, any and all moneys due or to become due with respect to any
condemnation proceeding affecting the Property. Net Proceeds of any insurance award resulting
from any damage to or destruction of any portion of the Facilities or the Property by fire or other
casualty, as applicable, of any title insurance award, or of any eminent domain or condemnation
award resulting from any event described in Section 9.01 hereof shall be applied as provided in
Section 9.02 hereof. At any time, whether before or after the occurrence of any Event of
Default, the Lender may (but need not) in furtherance of rights pursuant to Article IX hereof, in
the Lender’s name or in the Borrower’s name, execute and deliver proof of claim, receive all
such moneys, endorse checks and other instruments representing payment of such moneys, and
adjust, litigate, compromise or release any claim against the issuer of any such policy or party in
any condemnation proceeding.
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ARTICLE VII
AFFIRMATIVE COVENANTS OF BORROWER
Section 7.01. Maintenance of Facilities.
(a) The Borrower shall, at its own commercially reasonable expense,
maintain, preserve and keep the Facilities in good repair, working order and condition
consistent with its past practice, and shall from time to time make all reasonable repairs
and replacements necessary to keep the Facilities in such condition, and in compliance
with State and federal laws, ordinary wear and tear excepted. In the event that any parts
or accessories forming part of any item or items of Facilities become worn out, lost,
destroyed, damaged beyond repair or otherwise rendered unfit for use, the Borrower, at
its own commercially reasonable expense and expeditiously, will replace or cause the
replacement of such parts or accessories by replacement parts or accessories free and
clear of all liens and encumbrances and with a value and utility at least equal to that of
the parts or accessories being replaced (assuming that such replaced parts and accessories
were otherwise in good working order and repair). All such replacement parts and
accessories shall be deemed to be incorporated immediately into and to constitute an
integral portion of the Facilities and, as such, shall be subject to the terms of this Loan
Agreement. Neither the Issuer nor the Lender shall have any responsibility in any of
these matters, or for the making of repairs to the Facilities or additions to the Facilities.
(b) The Borrower shall observe and comply with all legal requirements
applicable to the ownership, use and operation of the Facilities, including the terms and
conditions set forth in this Loan Agreement, the Deed of Trust and the Tax Regulatory
Agreement. The Borrower shall permit the Lender and its agents, representatives and
employees, upon reasonable prior notice to the Borrower, to inspect the Facilities and
conduct such environmental and engineering studies as the Lender may reasonably
require, provided such inspections and studies are conducted during normal business
hours and do not materially interfere with the use and operation of the Facilities. Such
environmental and engineering studies shall be at the Borrower’s commercially
reasonable expense, provided that Lender provides the Borrower with evidence of
Lender’s reasonable belief that there is an environmental or structural condition at the
Facilities that could have a material adverse effect on the Lender’s security under the
Loan Documents.
(c) The Borrower will defend the Facilities against all claims or demands of
all persons (other than the Lender hereunder and other than Permitted Encumbrances)
claiming the Facilities or any interest therein.
Section 7.02. Compliance with Laws and Obligations. The Borrower will comply
with the requirements of applicable laws and regulations and material contractual obligations, the
noncompliance with which would materially and adversely affect its business or its financial
condition; provided, however, nothing herein shall preclude the Borrower’s right to contest in
good faith by appropriate proceedings any claim of noncompliance or breach.
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Section 7.03. Payment of Taxes and Other Claims. The Borrower will pay or
discharge, when due, (a) all taxes, assessments and governmental charges levied or imposed
upon it or upon its income or profits, upon any properties belonging to it (including, without
limitation, the Facilities) or upon or against the creation, perfection or continuance of the security
interest created pursuant to this Loan Agreement or any of the Loan Documents, prior to the date
on which penalties attach thereto; (b) all federal, state and local taxes required to be withheld by
it; and (c) all lawful claims for labor, materials and supplies which, if unpaid, might by law
become a lien or charge upon any properties of the Borrower; provided, that the Borrower shall
not be required to pay any such tax, assessment, charge or claim whose amount, applicability or
validity is being contested in good faith by appropriate proceedings. The Borrower will pay, as
the same respectively come due, all gas, water, steam, electricity, heat, power, telephone, utility
and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the
Property and the Facilities; provided, that the Borrower shall not be required to pay any such
charge whose amount, applicability or validity is being contested in good faith by appropriate
proceedings.
Section 7.04. Insurance; Indemnity.
(a) During the construction of the Improvements or of any improvements to
the Facilities with an aggregate cost in excess of $250,000, the Borrower shall maintain
builder’s risk insurance, including theft, to insure, without limitation, all buildings,
materials, supplies, temporary structures, foundations, other underground property, tenant
improvements, and all other property on-site and while in transit which is to be used in
fabrication, construction, and completion of such Improvements being constructed, and to
remain in effect until all such Improvements being constructed have been completed and
accepted by the Borrower and the Lender (or the Lender’s designee) and a certificate of
occupancy has been issued. Such insurance shall be in an amount equal to $17,781,955
with a deductible not to exceed $889,017.75 and be provided on a replacement cost value
basis and shall (i) be on a non-reporting, completed value, form; (ii) cover damage to
landscaping and debris removal expense (including removal of pollutants as available by
standard underwriting placements); (iii) provide that the Borrower can complete and
occupy the premises without further written consent from the insurer; (iv) not exclude
losses due to explosions, collapses, or underground hazards; (v) cover soft costs and
continuing expenses not directly involved in the direct cost of construction or renovation,
including interest on money borrowed to finance construction or renovation, advertising,
promotion, real estate taxes and other assessments, the cost of renegotiating leases,
architectural and engineering costs, legal and accounting costs, and other expenses
incurred as the result of property loss or destruction by the insured peril; (vi) cover riots,
civil commotion, theft, vandalism, and malicious mischief; (vii) not contain any
safeguard warranties that are not fulfilled prior to policy placement; and (viii) not contain
any monthly limitation. The Borrower shall provide or cause to be provided to the Lender
a copy of the builder’s risk insurance policy prior to the commencement of the
construction of the Improvements with an aggregate cost in excess of $250,000.
(b) If requested by the Lender with respect to any time any Improvements
with an aggregate cost in excess of $250,000 are under construction, the Borrower shall
cause each Contractor performing any of such construction work to maintain worker’s
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compensation insurance or other applicable insurance providing coverage for injuries to
such Contractor’s personnel, auto liability insurance, and general liability insurance, all in
the amounts and providing coverage as is reasonably acceptable to the Lender.
(c) The Borrower shall, at its own expense, maintain and keep in force
commercial general liability and automobile liability insurance against claims arising in,
on or about the Property, including in, on or about the sidewalks or premises adjacent to
the Property, providing coverage limits not less than $1,000,000 per occurrence and
$2,000,000 in aggregate.
(d) In addition, the Borrower shall, at its own expense, maintain and keep in
force insurance of the types and in amounts customarily carried by institutions similar to
the Borrower, including but not limited to fire and extended all-risk coverage (in an
amount not less than $36,654,929 with a deductible not to exceed $1,000,000, without
deductions for depreciation, and including all fixtures and personal property and
endorsements for any non-conforming uses), flood (if the Borrower’s property is located
in a flood zone), property damage, workers’ compensation, business interruption
covering not less than six (6) months, and abuse or molestation liability coverage,
covering, among other items, negligence in employing, investigation, retaining, and
supervising “employees” or volunteer workers with all such insurance carried with
companies, in amounts and with deductible amounts reasonably satisfactory to the
Lender, and deliver to the Lender from time to time at the Lender’s request schedules
setting forth all insurance then in effect. Alternatively, upon the written approval of the
Lender, the Borrower may insure the Facilities under a blanket insurance policy or
policies which cover not only the Facilities, but also other properties of the Borrower or,
upon prior written approval of the Lender, may provide self-insurance acceptable to the
Lender.
(e) All of the insurance policies required hereunder shall be issued by
corporate insurers licensed to do business in the State and rated AVII or better by A.M.
Best Company, shall contain a waiver of subrogation endorsement which shall provide
for not less than thirty (30) days’ notice of cancellation, and shall be in form acceptable
to the Lender.
(f) All certificates of insurance and “blanket” insurance policies shall
reference the specific project being covered by name and address and shall name the
Lender as a mortgagee or loss payee (with respect to property insurance) and as an
additional insured (with respect to liability insurance). The insurance shall be evidenced
by the original policy or a true and certified copy of the original policy, or in the case of
liability insurance, by certificates of insurance on Acord form 27 or 28 (for building
contents or property) or Acord form 25 (for liability). Certified copies of the policies of
insurance required to be maintained hereunder shall be delivered to the Lender upon
request. The Borrower shall use its best efforts to deliver originals of all policies and
renewals (or certificates evidencing the same), marked “paid” (or evidence satisfactory to
the Lender of the continuing coverage) to the Lender at least thirty (30) days before the
expiration of existing policies and, in any event, the Borrower shall deliver originals of
such policies or certificates (or other proof of insurance acceptable to Lender) to the
46
Lender at least fifteen (15) days before the expiration of existing policies. If the Lender
has not received satisfactory evidence of such renewal or substitute insurance in the time
frame herein specified, the Lender shall have the right, but not the obligation, to purchase
such insurance for the Lender’s interest only. Nothing contained in this Section shall
require the Lender to incur any expense or take any action hereunder, and inaction by the
Lender shall never be considered a waiver of any right accruing to the Lender on account
of this Section. If any loss shall occur at any time while an Event of Default shall have
occurred and be continuing, the Lender shall be entitled to the benefit of all insurance
policies held or maintained by the Borrower, to the same extent as if same had been made
payable to the Lender. The Lender shall have the right, but not the obligation to make
premium payments, at the Borrower’s expense, to prevent any cancellation, endorsement,
alteration or reissuance of any policy of insurance maintained by the Borrower, and such
payments shall be accepted by the insurer to prevent same.
(g) The Borrower shall give to the Lender prompt notice of any loss with an
estimated replacement value in excess of $250,000 occurring on or with respect to the
Property. The Borrower shall furnish to the Lender, upon request, certificates of
insurance evidencing such coverage while the Loans are outstanding.
(h) Upon the written request of the Lender at any time, any insurance policy
carried or maintained pursuant to this Section (other than the worker’s compensation
policy) shall be so written or endorsed as to make losses, if any, payable to the Lender
and the Issuer or the Borrower, as their respective interests may appear and naming the
Lender as additional insured for liability. The Net Proceeds of the insurance required in
this Section shall be applied as provided in Article IX hereof. Each insurance policy
provided for in this Section shall contain a provision to the effect that the insurance
company providing such policy shall not either cancel the policy or modify the policy
materially and adversely to the interest of the Lender without first giving written notice
thereof to the Lender at least 30 days in advance of such cancellation or modification.
(i) As among the Lender, the Issuer and the Borrower, the Borrower assumes
all risks and liabilities from any cause whatsoever, whether or not covered by insurance,
for loss or damage to the Facilities, and for injury to or death of any person or damage to
any property, whether such injury or death be with respect to agents or employees of the
Borrower or of third parties, and whether such property damage be to the Borrower’s
property or the property of others. Whether or not covered by insurance, the Borrower
hereby assumes responsibility for and agrees to reimburse the Lender and the Issuer for
and will indemnify, defend and hold the Lender and the Issuer and any of their assignees,
agents, employees, officers and directors harmless from and against all liabilities,
obligations, losses, damages, penalties, claims, actions, costs and expenses (including
reasonable attorneys’ fees) of whatsoever kind and nature, imposed on, incurred by or
asserted against the Lender or the Issuer or their assignees, agents, employees, officers
and directors that in any way relate to or arise out of this Loan Agreement or the Loan,
the transactions contemplated hereby and thereby and the Facilities or the Property,
including but not limited to, (i) the ownership of the Facilities or the Property, (ii) the
delivery, lease, possession, maintenance, use condition, return or operation of
components of the Facilities or the Property, (iii) the conduct of the Borrower, its
47
officers, employees and agents, (iv) a breach by the Borrower of any of its covenants or
obligations hereunder, and (v) any claim, loss, cost or expense involving alleged damage
to the environment relating to the Facilities or the Property, including, but not limited to
investigation, removal, cleanup and remedial costs. All amounts payable by the
Borrower pursuant to the immediately preceding sentence shall be paid immediately upon
demand of the Issuer or the Lender or their assignees, agents, employees, officers and
directors, as the case may be. This provision shall survive the termination of this Loan
Agreement for any reason.
Section 7.05. Reporting Requirements. The Borrower will deliver, or cause to be
delivered, to the Lender, and to the Issuer if requested by the Issuer, each of the following, which
shall be in form and detail reasonably acceptable to the Lender and the Issuer, as to information
requested by the Issuer:
(a) not later than 150 days after and as of the end of each fiscal year, financial
statements of the Borrower, including therein a balance sheet, income statement,
statement of cash flows and reconciliation of the Borrower’s net assets, audited by
independent certified public accountants reasonably acceptable to the Lender and
certified, without any qualifications, by such accountants to have been prepared in
accordance with GAAP consistently applied, together, with a certificate of an Authorized
Borrower Representative addressed to the Lender stating that such Authorized Borrower
Representative does not have knowledge of the existence of any event or condition
constituting an uncured Default or an Event of Default; provided that Lender
acknowledges and agrees that, as of the Closing Date, West Rhode & Roberts, Certified
Public Accountants, are acceptable as the Borrower’s accountants for purposes of this
section;
(b) contemporaneously with the submittal of the financial statement required
by subsection (a) above, a certificate of the Authorized Borrower Representative
substantially in the form attached hereto as Exhibit H stating all relevant facts in
reasonable detail to evidence, and the computations as to, whether the Borrower is in
compliance with the requirements set forth in Section 7.16 hereof applicable to the period
covered by the accompanying financial statements or bank statements, as applicable;
(c) during the construction of the Improvements, not later than 30 days after
each fiscal quarter and as of such date, commencing December 31, 2015, quarterly
financial statements of the Borrower, including therein a balance sheet and income
statement, prepared in accordance with GAAP consistently applied, internally prepared
by the Borrower, together with a schedule of the Borrower’s cumulative Capital
Campaign Contributions;
(d) following the completion of the Improvements, not later than 60 days after
each June 30 and December 31 and as of such date, commencing December 31, 2017,
semi-annual financial statements of the Borrower, including therein a balance sheet and
income statement, prepared in accordance with GAAP consistently applied, internally
prepared by the Borrower, together with reasonable detail to evidence, and the
computations as to, whether the Borrower is in compliance with the requirements set
48
forth in Section 7.16(a) hereof applicable to the period covered by the accompanying
financial statements or bank statements, as applicable;
(e) not later than 30 days after the beginning of each Fiscal Year, a copy of
the annual budget for such Fiscal Year, as adopted by the Board of Directors of the
Borrower;
(f) promptly upon the occurrence and nature of any Reportable Event or
Prohibited Transaction, each as defined in the Employee Retirement Income Security Act
of 1974, as amended or recodified from time to time (“ERISA”), or any funding
deficiency with respect to any defined employee pension benefit plan (as defined in
ERISA) maintained or contributed to by the Borrower;
(g) promptly upon actual knowledge thereof, notice of any loss or destruction
of or damage to any portion of Facilities in excess of $250,000 or of any material adverse
change in the Facilities;
(h) promptly after the amending thereof, copies of any and all amendments to
the Borrower’s articles of incorporation or bylaws;
(i) promptly upon receipt of notice or actual knowledge thereof by an
Authorized Borrower Representative, notice of the violation by the Borrower of any law,
rule or regulation, the violation of which would have a material adverse effect on the
financial or operating condition of the Borrower;
(j) promptly upon written notice or actual knowledge thereof, any termination
or cancellation of any insurance policy which the Borrower is required to maintain
hereunder, or any uninsured or partially uninsured loss through liability or property
damage, or through fire, theft or any other cause affecting the Borrower’s property in
excess of an aggregate of $250,000;
(k) immediately upon the Borrower’s actual knowledge thereof, notice in
writing of all litigation and of all proceedings before any governmental or regulatory
agency affecting the Borrower which seek a monetary recovery against the Borrower in
excess of $250,000 which is not covered by insurance;
(l) as promptly as practicable (but in any event not later than five Business
Days) after an Authorized Borrower Representative obtains knowledge of the occurrence
of any event that constitutes a Default or an Event of Default under the Loan Documents,
notice of such occurrence, together with a detailed statement by an Authorized Borrower
Representative of the steps being taken by the Borrower to cure the effect of such Default
or Event of Default;
(m) within 60 days of receipt of a written request from the Issuer, a written
report, as of the end of the Borrower’s prior fiscal year, stating the status of the Project
and the unpaid outstanding balance of the Loan; and
49
(n) from time to time such other information as the Lender or the Issuer may
reasonably request, including, without limitation, other information with respect to any
Collateral and Capital Campaign Contributions.
Section 7.06. Books and Records; Inspection and Examination. The Borrower will
keep accurate books of record and account for itself separate and apart from those of its
affiliates, including its officers, pertaining to the Project and pertaining to the Borrower’s
business and financial condition and such other matters as the Lender and/or the Issuer may from
time to time reasonably request in which true and complete entries will be made in accordance
with GAAP consistently applied and, upon written request of the Lender not more than once per
calendar year or at any time after the occurrence of an Event of Default, will permit any officer,
employee, attorney or accountant for the Lender and/or the Issuer or, at the written request of the
Issuer to the Borrower and only pursuant to a request from the Internal Revenue Service, a
representative of the Internal Revenue Service, to audit, review, make extracts from, or copy any
and all organization and financial books and records of the Borrower and to examine and inspect
the Facilities, the Property and the Collateral, and to discuss the affairs of the Borrower with any
of its officers, employees or agents at all times during ordinary business hours (a) within three
Business Days of a written request by the Lender and/or the Issuer, or (b) at any time after the
occurrence of an Event of Default.
Section 7.07. Performance by the Lender. If the Borrower at any time fails to perform
or observe any of the covenants or agreements contained in the Loan Documents (except for the
Tax Regulatory Agreement), immediately upon the occurrence of such failure, without notice or
lapse of time, but after giving effect to any applicable cure periods or contest rights of the
Borrower pursuant to the terms such covenants or agreements, the Lender may, but need not,
perform or observe such covenant on behalf and in the name, place and stead of the Borrower
(or, at the Lender’s option, in the Lender’s name) and may, but need not, take any and all other
actions which the Lender may reasonably deem necessary to cure or correct such failure
(including, without limitation, the payment of taxes, the satisfaction of security interests, liens or
encumbrances, the performance of obligations owed to account debtors or other obligors, the
procurement and maintenance of insurance, the execution of assignments, security agreements
and financing statements, and the endorsement of instruments); and the Borrower shall thereupon
pay to the Lender on demand the amount of all moneys expended and all reasonable costs and
expenses (including reasonable attorneys’ fees and legal expenses) incurred by the Lender in
connection with or as a result of the performance or observance of such agreements or the taking
of such action by the Lender, together with interest thereon from the date expended or incurred at
the highest rate permitted by law; provided, however, that such rate shall not exceed 12% per
annum. In furtherance of the foregoing, the Borrower hereby irrevocably appoints the Lender, or
the delegate of the Lender, acting alone, as the attorney in fact of the Borrower, with a limited
power of attorney, coupled with an interest, with the right (but not the duty) from time to time to
create, prepare, complete, execute, deliver, endorse or file in the name and on behalf of the
Borrower any and all instruments, documents, assignments, security agreements, financing
statements, applications for insurance and other agreements and writings relating to the Property
or the Facilities required to be obtained, executed, delivered or endorsed by the Borrower under
this Loan Agreement.
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Notwithstanding anything herein to the contrary, the Issuer shall have the right to enforce
the Borrower’s covenants, agreements and representations in the Tax Regulatory Agreement
against the Borrower pursuant to the terms thereof.
Section 7.08. Preservation of Existence. The Borrower will preserve and maintain its
existence, its status as a nonprofit religious corporation and an organization described in Section
501(c)(3) of the Code, and all of its permits, rights, privileges and franchises necessary or
desirable in the normal conduct of its business; and shall conduct its business in an orderly,
efficient and regular manner. The Borrower shall hold itself out to the public as a legal entity
separate and distinct from any other entity (including any affiliate thereof). So long as the Issuer
Loan Obligations remain outstanding, the Borrower will be qualified to transact business in the
State and will be engaged in business in the State. The Borrower shall maintain full accreditation
by the Western Association of Schools and Colleges, or its successor, or such replacement
accrediting agency as commonly used by comprehensive independent schools in the State or in
the western region of the United States of America.
Section 7.09. No Liability for Consents or Appointments. Whenever any provision
herein provides for the giving of consent or direction by the Issuer, the Issuer shall not be liable
to the Borrower or to the Lender for the giving of such consent or direction or for the
withholding of such consent or direction. The Issuer shall have no liability for appointments
which are required to be made by it under this Loan Agreement or any documents related
thereto.
Section 7.10. Non-Liability of the Issuer. No agreements or provisions contained in
this Loan Agreement nor any agreement, covenant, or undertaking by the Issuer in connection
herewith shall give rise to any pecuniary liability of the Issuer or a charge against its general
credit, or shall obligate the Issuer financially in any way, except as may be payable from
Payments made pursuant to the Borrower Loans and their application as provided herein. No
failure of the Issuer to comply with any term, covenant, or agreement contained herein, or in any
document executed by the Issuer in connection herewith, shall subject the Issuer to liability for
any claim for damages, costs, or other financial or pecuniary charge, except to the extent that the
same can be paid or recovered from Payments made pursuant to the Borrower Loans. Nothing
herein shall preclude a proper party in interest from seeking and obtaining, to the extent
permitted by law, specific performance against the Issuer for any failure to comply with any
term, condition, covenant or agreement contained herein, or any obligations imposed upon the
Issuer pursuant hereto, or the breach thereof. In making the agreements and provisions set forth
in this Loan Agreement, the Issuer has not obligated itself, except with respect to the application
of Payments made pursuant to the Borrower Loans hereunder.
Section 7.11. Expenses. The Borrower covenants and agrees to pay, and to indemnify
the Issuer against all reasonable costs, charges and expenses, including fees and disbursements of
attorneys, accountants, consultants and other experts, incurred by the Issuer in good faith in
connection with the Loans and the Loan Documents. The Borrower covenants and agrees to pay,
and to indemnify Lender against all reasonable costs, charges and expenses, including fees and
disbursements of attorneys, accountants, consultants and other experts, incurred by the Lender in
good faith in connection with the Loans and the Loan Documents.
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Section 7.12. No Personal Liability.
(a) The Issuer shall not be obligated to pay the principal of or interest on the
Issuer Loan Obligations, except from Payments under the Borrower Loans and any other
moneys and assets received by the Issuer for such purpose pursuant to this Loan
Agreement. Neither the faith and credit nor the taxing power of the State or any political
subdivision thereof, nor the faith and credit of the Issuer is pledged to the payment of the
principal or interest on the Issuer Loan Obligations. Neither the Issuer nor its officers,
directors, agents or employees or their successors and assigns shall be liable for any
costs, expenses, losses, damages, claims or actions, of any conceivable kind or any
conceivable theory, under, by reason of or in connection with this Loan Agreement or the
Issuer Loan Obligations, except only to the extent amounts are received for the payment
thereof from the Borrower under this Loan Agreement.
(b) Borrower hereby acknowledges that the Issuer’s sole source of moneys to
repay the Issuer Loan Obligations will be provided by Payments made by the Borrower
under the Borrower Loans pursuant to this Loan Agreement, and hereby agrees that if the
payments to be made hereunder shall ever prove insufficient to pay all principal and
interest on the Issuer Loan Obligations as the same shall become due (whether by
maturity, redemption, acceleration or otherwise),the Borrower shall pay such amounts as
are required from time to time to prevent any deficiency or default in the payment of such
principal or interest, including, but not limited to, any deficiency caused by acts,
omissions, nonfeasance or malfeasance on the part of the Borrower, the Issuer or any
third party, subject to any right of reimbursement from the Issuer or any such third party,
as the case may be, therefor but solely, in the case of the Issuer, from the Payments or
Additional Payments (other than funds paid to the Issuer pursuant to Reserved Issuer
Rights), other than with respect to any deficiency caused by the willful misconduct of the
Issuer.
(c) No director, member, officer, agent or employee of the Issuer or any
director, officer, agent or employee of the Borrower shall be individually or personally
liable for the payment of any principal (or Prepayment Fee) or interest on the Issuer Loan
Obligations or any other sum hereunder or be subject to any personal liability or
accountability by reason of the execution and delivery of this Loan Agreement, but
nothing herein contained shall relieve any such member, director, officer, agent or
employee from the performance of any official duty provided by law or by this Loan
Agreement.
Section 7.13. Borrower Indemnification of the Issuer. The Borrower covenants and
agrees as follows:
(a) To the fullest extent permitted by law, the Borrower agrees to indemnify,
hold harmless and defend the Issuer, and each of its past, present and future officers,
governing directors, officials, employees, attorneys and agents (collectively, the
“Indemnified Parties”), against any and all losses, damages, claims, actions, liabilities,
costs and expenses of any conceivable nature, kind or character (including, without
limitation, reasonable attorneys’ fees, litigation and court costs, amounts paid in
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settlement and amounts paid to discharge judgments) to which the Indemnified Parties, or
any of them, may become subject under or any statutory law (including federal or state
securities laws) or at common law or otherwise, arising out of or based upon or in any
way relating to:
(i) the Loans or the Issuer Documents or the execution or amendment
hereof or thereof or in connection with transactions contemplated hereby or
thereby;
(ii) any act or omission of the Borrower or any of its agents,
contractors, servants, employees, tenants) or licensees in connection with the
Improvements or the Facilities, the operation of the Improvements or the
Facilities, or the condition, environmental or otherwise, occupancy, use,
possession, conduct or management of work done in or about, or from the
planning, design, acquisition, installation or construction of, the Improvements or
the Facilities or any part thereof;
(iii) any Lien or charge upon payments by the Borrower to the Issuer
hereunder, or any taxes (including, without limitation, all ad valorem taxes and
sales taxes), assessments, impositions and other charges imposed on the Issuer in
respect of any portion of the Improvements or the Facilities;
(iv) any violation of any Environmental Regulations with respect to, or
the release of any Hazardous Materials from, the Improvements or the Facilities
or any part thereof;
(v) the defeasance or prepayment, in whole or in part, of the Loan;
(vi) any Determination of Taxability of interest on the Issuer Loan
Obligations, or allegations that interest on the Issuer Loan Obligations is taxable
or any regulatory audit or inquiry regarding whether interest in the Issuer Loan
Obligations is taxable;
(vii) any untrue statement or misleading statement or alleged untrue
statement or alleged misleading statement of a material fact contained in any
offering statement or disclosure or continuing disclosure document for the Loans
or any of the documents relating to the Loan, or any omission or alleged omission
from any offering statement or disclosure or continuing disclosure document for
the Loan of any material fact necessary to be stated therein in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading;
provided that the foregoing indemnification shall not be available to the extent such damages are
caused by the gross negligence or willful misconduct of such Indemnified Party. In the event
that any action or proceeding is brought against any Indemnified Party with respect to which
indemnity may be sought hereunder, the Borrower, upon written notice from the Indemnified
Party, shall assume the investigation and defense thereof, including the employment of counsel
selected by the Borrower and reasonably approved by the Indemnified Party, and shall assume
53
the payment of all expenses related thereto, with full power to litigate, compromise or settle the
same in its sole discretion; provided that the Indemnified Party shall have the right to review and
approve or disapprove any such compromise or settlement. Each Indemnified Party shall have
the right to employ separate counsel in any such action or proceeding and participate in the
investigation and defense thereof, and the Borrower shall pay the reasonable fees and expenses
of such separate counsel; provided, however, that such Indemnified Party may only employ
separate counsel at the expense of the Borrower if in the reasonable judgment of such
Indemnified Party a conflict of interest exists by reason of common representation or if all
parties commonly represented do not reasonably agree as to the action (or inaction) of counsel.
(b) The rights of any persons to indemnity hereunder and rights to payment of
fees and reimbursement of expenses pursuant to this Loan Agreement shall survive the
final payment or prepayment of the Issuer Loan Obligations. The provisions of this
Section shall survive the termination of this Loan Agreement.
Section 7.14. Borrower Indemnification of the Lender. The Borrower covenants and
agrees as follows:
(a) to indemnify and hold harmless, to the extent permitted by law, the Lender
and its affiliates, their respective incorporators, members, commissioners, directors,
officers, agents and employees (collectively, the “Indemnified Persons”) against all
liability, losses, damages, all reasonable costs and charges (including reasonable fees and
disbursements of attorneys, accountants, consultants and other experts), taxes, causes of
action, suits, claims, demands and judgments of every conceivable kind, character and
nature whatsoever, by or on behalf of any person arising in any manner from the
transaction of which this Loan Agreement is a part or arising in any manner in connection
with the Project, the Property and/or Facilities, including, but not limited to, losses,
claims, damages, liabilities or reasonable expenses arising out of, resulting from or in any
way connected with (i) the work done on the Property or the operation of the Facilities
during the term of this Loan Agreement, including, without limitation, any liability for
any loss or damage to property or any injury to or death of any person that may be
occasioned by any cause whatsoever pertaining to the Facilities; (ii) any violation of
contract, agreement (including this Loan Agreement and the Tax Regulatory Agreement)
or restriction relating to the Facilities; (iii) any violation of law, ordinance or regulation
affecting the Facilities or any part thereof or the ownership or occupancy or use thereof;
or (iv) the carrying out of any of the transactions contemplated by this Loan Agreement
and all related documents;
(b) promptly after receipt by an Indemnified Person of notice of the
commencement of any action in respect of which indemnification may be sought under
this Section 7.14, the Indemnified Person shall promptly notify the Borrower in writing,
but the delay to so notify the Borrower will not relieve the Borrower from any liability
which it may have to any Indemnified Person under this Section 7.14 other than to the
extent of prejudice caused directly or indirectly by such delay nor affect any rights it may
have to participate in and/or assume the defense of any action brought against any
Indemnified Person; and
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(c) notwithstanding the previous provisions of this Section 7.14,the Borrower
is not liable for or obligated to indemnify any Indemnified Person harmless against any
loss or damage to property or injury or death to any person or any other loss or liability if
and to the extent such loss, damage, liability, injury or death results from the gross
negligence or willful misconduct of any Indemnified Person seeking such
indemnification.
All indemnifications by the Borrower in this Section 7.14 shall survive (a) the
termination of this Loan Agreement, (b) payment of the indebtedness hereunder, (c) foreclosure
or deed in lieu thereof, or reconveyance or cancellation of the Deed of Trust, (d) sale or other
transfer of the Property by the Borrower, and (e) the exercise of any of the Lender’s other rights
and remedies under the Loan Documents or at law.
Section 7.15. Covenant to Enter into Agreement or Contract to Provide Ongoing
Disclosure. The Borrower and the Lender intend that this Loan Agreement be exempt from the
requirements of Paragraph (b)(5)(i) of the Securities and Exchange Commission Rule 15c2-12
under the Securities Exchange Act of 1934, as amended (17 CFR Part 240, § 240.15c2-12) (the
“Rule”). The Borrower hereby covenants and agrees that if this Loan Agreement ceases to be
exempt under the Rule, the Borrower will enter into an agreement or contract, constituting an
undertaking, to provide ongoing disclosure as may be necessary to comply with the Rule as then
in effect.
Section 7.16. Financial Covenants.
(a) Borrower shall maintain unencumbered Net Unrestricted Cash and
Investments in an amount not less than $3,000,000, verified not more frequently than
semi-annually as of each June 30 and December 31, commencing December 31, 2015.
(b) Borrower shall maintain a Debt Service Coverage Ratio of not less than
1.15 to 1.00, measured annually based on the audited financial statements of the
Borrower as of the end of each fiscal year, commencing the fiscal year ended June 30,
2016.
Section 7.17. Deposit Relationship. The Borrower and Lender agree as follows:
(a) So long as the Loans are outstanding and MUFG Union Bank, N.A. or an
Affiliate thereof is the Lender hereunder, the Borrower shall maintain its checking and
other general deposit accounts, as well as the Project Fund, with Lender.
(b) Borrower authorizes Lender to make automatic deductions from the
following deposit account (“Account”) maintained by the Borrower at the Lender’s
offices in order to pay, when and as due, all of the Payments that the Borrower is required
or obligated to make under this Loan Agreement:
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funds in the Account are insufficient to make such Payment in full on the date that such Payment
is due, then the Borrower shall be responsible for all late payment charges and other
consequences of such default by the Borrower under the terms of the Borrower Documents.
(c) Subject to subparagraph (d) below, this authorization shall continue in full
force and effect until the date which is five (5) Business Days after the date on which
Lender actually receives written notice from the Borrower expressly revoking the
authority granted to Lender to charge the Account for Payments in connection with the
Borrower Loans. No such revocation by the Borrower shall in any way release the
Borrower from or otherwise affect the Borrower’s obligations under the Borrower
Documents, including the Borrower’s obligations to continue to make all Payments
required under the terms of this Loan Agreement.
(d) The Lender, so long as MUFG Union Bank, N.A. is the Lender hereunder,
at its option and in its discretion, reserves the right to terminate the arrangement for
automatic deductions from the Account pursuant to this subparagraph (d) at any time
effective upon written notice of such election (a “Termination Notice”) given by Lender
to the Borrower. Without limiting the generality of the immediately preceding sentence,
the Lender may elect to give a Termination Notice to the Borrower if the Borrower fails
to comply with any of the Lender’s rules, regulations, or policies relating to the Account,
including requirements regarding minimum balance, service charges, overdrafts,
insufficient funds, uncollected funds, returned items, and limitations on withdrawals.
Section 7.18. Tax Covenants of the Issuer and the Borrower.
(a) The Issuer covenants as follows:
(i) The Issuer shall not take any action, or fail to take any action
within its control and required of it by the Issuer Documents, if such action or
failure to take such action would result in the interest on the Issuer Loan
Obligations not being excluded from gross income for federal income tax
purposes under Section 103 of the Code. Without limiting the generality of the
foregoing, the Issuer covenants that it will comply with the requirements of the
Tax Agreement applicable to it which is incorporated herein as if fully set forth
herein; provided, however, that with regard to the covenants of the Issuer to act or
refuse to act in a certain manner in the future pursuant to this section or the Tax
Regulatory Agreement, the Issuer is relying exclusively on the Borrower to act or
refuse to act in the appropriate manner except to the extent a particular action by
the Issuer is required or prohibited. Any requirement that the Issuer will not
permit or allow an action, or similar requirement, shall pertain solely to the
actions of the Issuer and the Issuer shall have no obligation to prevent, or to
attempt to prevent, any action by the Borrower. This covenant shall survive the
payment in full and prepayment of the Issuer Loan Obligations.
(ii) In the event that at any time the Issuer is of the opinion that for
purposes of this Section it is necessary or helpful to restrict or limit the yield on
the investment of any moneys under this Loan Agreement, the Issuer shall so
56
instruct the Borrower in writing accompanied by a supporting opinion of Special
Counsel, and the Borrower shall take such action as may be directed by the Issuer.
(iii) Notwithstanding any provisions of this Section, if the Issuer
provides to the Borrower an opinion of Special Counsel to the effect that any
specified action required under this Section is no longer required or that some
further or different action is required to maintain the exclusion from federal
income tax of interest on the Issuer Loan Obligations, the Borrower may
conclusively rely on such opinion in complying with the requirements of this
Section and the Tax Regulatory Agreement, and the covenants hereunder shall be
deemed to be modified to that extent.
(b) The Borrower covenants as follows:
(i) The Borrower will not take any action that would cause the interest
on the Issuer Loan Obligations to become includable in gross income of the
recipient for federal income tax purposes under the Code (including, without
limitation, intentional acts under Treas. Reg. § 1.148-2(c) or deliberate action
within the meaning of Treas. Reg. § 1.141-2(d)), and the Borrower will take and
will cause its officers, employees and agents to take all affirmative actions legally
within its power necessary to ensure that the interest on the Issuer Loan
Obligations does not become includable in gross income of the recipient for
federal income tax purposes under the Code (including, without limitation, the
calculation and payment of any rebate required to preserve such exclusion).
Without limiting the generality of the foregoing, the Borrower covenants that it
shall comply with the requirements of the Tax Regulatory Agreement, which is
incorporated herein as if fully set forth herein. This covenant shall survive the
payment in full and prepayment of the Loans.
(ii) The Issuer has covenanted in this Loan Agreement to take any and
all actions within its control necessary to assure compliance with Section 148(f)
of the Code, relating to the rebate of excess investment earnings, if any, to the
federal government, to the extent that such Section is applicable to the Issuer
Loan Obligations. In furtherance of this covenant, the Borrower, on behalf of the
Issuer, hereby covenants (A) initially, on or before September 1, 2020 and on or
before September 1 of every fifth year thereafter, to calculate, or cause to be
calculated, the “rebate amount” in accordance with Section 148(f) and Section
1.148-2 of the Regulations, (B) to provide such calculations to the Issuer within
30 days of each calculation date, and (C) to pay the federal government any such
“rebate amount” so calculated to the extent required by Section 148(f) of the
Code. The Borrower further agrees to comply with the provisions and
requirements of the Tax Regulatory Agreement relating to the Issuer’s obligation
to pay the rebate amount as required hereunder and under Section 148 of the
Code.
(iii) Notwithstanding any provisions of this Section, if the Borrower
provides to the Issuer an opinion of Special Counsel to the effect that any
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specified action required under this Section is no longer required or that some
further or different action is required to maintain the exclusion from federal
income tax of interest on the Issuer Loan Obligations, the Issuer may conclusively
rely on such opinion in complying with the requirements of this Section and the
Tax Regulatory Agreement, and the covenants hereunder shall be deemed to be
modified to that extent.
Notwithstanding anything herein to the contrary, the Issuer shall have the right to enforce
the Borrower’s covenants, agreements and representations in the Tax Regulatory Agreement
against the Borrower pursuant to the terms thereof.
Section 7.19. Office of Foreign Assets Control; Patriot Act Compliance.
(a) The Borrower is not an entity (i) whose property or interest in property is
blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)),
(ii) who engages in any dealings or transactions prohibited by Section 2 of such executive
order, or is otherwise associated with any such Person in any manner violate of such
Section 2, or (iii) who is on the list of Specially Designated Nationals and Blocked
Persons or subject to the limitations or prohibitions under any other U.S. Department of
Treasury’s Office of Foreign Assets Control regulation or executive order.
(b) The Borrower is in compliance with the Patriot Act. No proceeds of the
Borrower Loans will be used, directly or indirectly, for payments to any governmental
official or employee, political party or its officials, candidate for political office, or
anyone else acting in an official capacity, in order to obtain, retain or direct business or
obtain any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended.
Section 7.20. Compliance With Documents. The Borrower agrees that it will perform
and comply with each and every covenant and agreement required to be performed or observed
by it in each of the Loan Documents to which it is a party, which provisions, as well as related
defined terms contained therein, are hereby incorporated by reference herein with the same effect
as if each and every such provision were set forth herein in its entirety all of which shall be
deemed to be made for the benefit of the Lender and shall be enforceable against the Borrower.
To the extent that any such incorporated provision permits the Borrower or any other party to
waive compliance with such provision or requires that a document, opinion or other instrument
or any event or condition be acceptable or satisfactory to the Borrower or any other party, for
purposes of this Loan Agreement, such provision shall be complied with unless it is specifically
waived by the Lender in writing and such document, opinion or other instrument and such event
or condition shall be acceptable or satisfactory only if it is acceptable or satisfactory to the
Lender which shall only be evidenced by the written approval by Lender of the same. No
termination or amendment to such covenants and agreements or defined terms or release of the
Borrower with respect thereto made pursuant to the Loan Documents to which the Borrower is a
party, shall be effective to terminate or amend such covenants and agreements and defined terms
or release the Borrower with respect thereto in each case as incorporated by reference herein
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without the prior written consent of the Lender. Notwithstanding any termination or expiration
of such other Loan Document to which the Lender is a party, the Borrower shall continue to
observe the covenants therein contained for the benefit of the Lender until the termination of this
Loan Agreement and the payment in full of the Loans and all other Obligations. All such
incorporated covenants shall be in addition to the express covenants contained herein and shall
not be limited by the express covenants contained herein nor shall such incorporated covenants
be a limitation on the express covenants contained herein.
Section 7.21. Compliance with ERISA. Except as would not reasonably be expected to
result in a Material Adverse Effect, the Borrower and each member of the Controlled Group shall
(i) remain at all times in compliance with all applicable Laws (including any legally available
grace periods) with respect to any Plan, (ii) at no time maintain any Plan that has Unfunded
Vested Liabilities and (iii) maintain each Plan as to which it may have any liability in
compliance in all material respects with the applicable provisions of ERISA, the failure to
comply with which could subject the Borrower or a member of its Controlled Group to any tax
or penalty.
Section 7.22. Environmental Laws. The Borrower shall comply with all applicable
Environmental Laws and cure any defect (or cause other Persons to cure any such defect) to the
extent necessary to bring such real property owned, leased, occupied or operated by the
Borrower back into compliance with Environmental Laws and to comply with any cleanup
orders issued by a Governmental Authority having jurisdiction there over. The Borrower shall at
all times use commercially reasonable efforts to render or maintain any real property owned,
leased, occupied or operated by the Borrower safe and fit for its intended uses. The Borrower
shall also promptly notify the Lender of any actual or alleged material failure to so comply with
or perform, or any material breach, violation or default under any Environmental Law.
ARTICLE VIII
NEGATIVE COVENANTS OF BORROWER
So long as the Borrower Loans shall remain unpaid, the Borrower agrees that:
Section 8.01. Lien. The Borrower shall not, directly or indirectly, create, incur, assume
or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to
the Property, Facilities or any other real or personal property of the Borrower, whether now
owned or hereafter acquired (each, a “Lien” and together, “Liens”), other than the rights of the
Lender or the Issuer as herein provided and the Permitted Encumbrances. The Borrower shall
promptly, at its own expense, take such action as may be necessary duly to discharge or remove
any such unpermitted Lien. The Borrower shall reimburse the Lender for any expenses incurred
by the Lender to discharge or remove any unpermitted Lien.
Section 8.02. Sale of Assets. The Borrower will not sell, lease, assign, transfer or
otherwise dispose of all or substantially all of its assets (other than in the ordinary course of
business or equipment or other personal property which has become inadequate, obsolete, worn
out, unsuitable, unprofitable, undesirable or unnecessary and the disposition thereof will not
impair the operations of the Borrower) or of any of the Property or the Facilities or any interest
59
therein (whether in one transaction or in a series of transactions), without the prior written
consent of the Lender and the delivery to the Issuer and the Lender of an opinion of Special
Counsel to the effect that any such sale, lease, assignment, transfer or other disposition will not
cause the interest on the Issuer Loan Obligations to be included in gross income of the owners
thereof. The Issuer Loan Obligations and the Borrower Loans shall become due and payable
upon the sale, assignment, transfer or other disposition of the Facilities or the Property or any
portion thereof, other than sales, assignments, transfers or other dispositions permitted by the
previous sentence. The Borrower shall provide the Issuer and the Lender with prior written
notice of its intention to sell, lease, assign, transfer or otherwise dispose of the Facilities or the
Property or any interest therein and shall agree in writing to remain liable under the Loan
Documents. In the event of a sale, assignment or transfer of the Facilities or the Property to an
affiliate of the Borrower (which shall also be subject to the Lender’s prior written consent), such
purchaser, assignee or transferee shall assume in writing the Borrower’s obligations under the
Loan Documents.
Section 8.03. Consolidation and Merger. The Borrower will not consolidate with or
merge into any person, or permit any other person to merge into it, or acquire (in a transaction
analogous in purpose or effect to a consolidation or merger) all or substantially all of the assets
of any other person without the prior written consent of the Lender and the Issuer
Section 8.04. Accounting. The Borrower will not adopt, permit or consent to any
material change in accounting principles other than as required or permitted by GAAP or adopt,
permit or consent to any change in its fiscal year unless the Borrower provides the Lender
restated financial statements in comparative form.
Section 8.05. Transfers. Other than as expressly permitted by this Loan Agreement, the
Borrower will not in any manner transfer any property, other than transfers made in the ordinary
course of business, without prior or present receipt of full and adequate consideration; provided,
that, the restriction contained in this Section shall not prohibit the Borrower from making
transfers in furtherance of its public or charitable purposes that could not reasonably be expected
to have a Material Adverse Effect.
Section 8.06. Other Indebtedness. Other than the Borrower Loans, the Borrower shall
not, without the prior written consent of the Lender, incur any additional indebtedness for
borrowed money or guaranty any indebtedness, secured or unsecured, direct or contingent,
except, so long as no Default or Event of Default has occurred and is continuing under this Loan
Agreement, (a) up to $100,000 in aggregate principal amount of indebtedness outstanding, and
(b) a line of credit and other indebtedness with the Lender.
Section 8.07. Other Defaults. The Borrower will not permit any material breach,
default or event of default to occur beyond any applicable cure period under any note, loan
agreement, indenture, lease, mortgage, contract for deed, security agreement or other contractual
obligation binding upon the Borrower or any judgment, decree, order or determination applicable
to the Borrower; provided, however, nothing herein shall preclude the Borrower’s right to
contest in good faith by appropriate proceedings any breach, default or event of default;
provided, such contest shall not, and shall not have the potential to, adversely affect the Lender’s
or the Issuer’s interests hereunder or under any of the other Loan Documents.
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Section 8.08. Prohibited Uses. The Borrower shall not use any portion of the proceeds
of the Borrower Loans to finance or refinance any facility, place or building used or to be used
(a) primarily for sectarian instruction or study or as a place for devotional activities or religious
worship, or (b) by a Person that is not a 501(c)(3) organization or a governmental entity or by an
organization (including the Borrower) described in Section 501(c)(3) of the Code (including the
Borrower) in an unrelated trade or business, in such manner or to such extent as would result in
any portion of the Issuer Loan Obligations being treated as an obligation not described in
Section 103(a) of the Code.
Section 8.09. Use of Facilities. The Borrower will not install, use, operate or maintain
the Project or the Facilities improperly, carelessly, in violation of any applicable law or in a
manner contrary to that contemplated by this Loan Agreement or the Tax Regulatory Agreement.
Section 8.10. Maintenance of Business. The Borrower shall not change its business
activities in any material respect from the business activities conducted by the Borrower as of the
date of this Loan Agreement.
Section 8.11. Restrictive Agreements. The Borrower shall not enter into any
agreement containing any provision which would be violated or breached by the performance by
the Borrower of its obligations hereunder or under any other Loan Documents or any instrument
or document delivered or to be delivered by the Borrower in connection herewith.
Section 8.12. Tax Exempt Status. The Borrower will not take any action that would
cause the interest on the Issuer Loan Obligations to become includable in gross income of the
recipient for federal income tax purposes under the Code (including, without limitation,
intentional acts under Treas. Reg. § 1.148-2(c) or deliberate action within the meaning of Treas.
Reg. § 1.141-2(d)), and the Borrower will take and will cause its officers, employees and agents
to take all affirmative action’s legally within its power necessary to ensure that the interest on the
Issuer Loan Obligations does not become includable in gross income of the recipient for federal
income tax purposes under the Code (including, without limitation, the calculation and payment
of any rebate required to preserve such exclusion).
Section 8.13. Federal Reserve Board Regulations. The Borrower will not use any part
of the proceeds of the Borrower Loans for the purpose of purchasing or carrying any Margin
Stock and has not incurred any indebtedness to be reduced, retired or purchased by the Borrower
out of such proceeds, and the Borrower does not own and has no intention of acquiring any
Margin Stock.
Section 8.14. Swap Agreements. The Borrower shall not enter into a Swap Agreement
without the prior written consent of the Lender.
Section 8.15. Loan Documents. The Borrower shall not modify, amend or consent to
any modification, amendment or waiver in any material respect of any Loan Document without
the prior written consent of the Lender.
Section 8.16. Formation of Subsidiaries and Affiliates. The Borrower shall not create,
form or acquire any Subsidiary or Affiliate without the prior written consent of the Lender.
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ARTICLE IX
DAMAGE, DESTRUCTION AND CONDEMNATION;
USE OF NET PROCEEDS
Section 9.01. Eminent Domain. If all or any portion of the Property or the Facilities
shall be taken permanently under the power of eminent domain or sold to a government
threatening to exercise the power of eminent domain, the Net Proceeds of any eminent domain
award shall be applied to the prepayment of the Borrower Loans and the Issuer Loan Obligations
in accordance with Section 4.08(b) of this Loan Agreement, unless otherwise agreed to by the
Lender and the Issuer, with an approving written opinion of Special Counsel to the effect that
under then-existing laws that such action would not cause the interest under this Loan Agreement
to become includable in gross income under the Code or adversely affect the validity of this
Loan Agreement.
Section 9.02. Application of Net Proceeds.
(a) Upon the written request of Lender, the Net Proceeds of any insurance
award resulting from any damage to or destruction of any portion of the Property or the
Facilities by fire or other casualty, as applicable, of any title insurance award, or of any
eminent domain or condemnation award resulting from any event described in Section
9.01 hereof shall be deposited with the Lender, who shall determine the application of
such proceeds; provided, however, that the Lender shall release to the Borrower without
further limitations all insurance awards of up to $100,000 received on behalf of the
Borrower in the normal course of business (except to the extent a Default or Event of
Default shall have occurred and be continuing hereunder. The Borrower, except as
provided below, shall cause the proceeds of insurance or eminent domain or
condemnation awards with respect to the Property to be utilized for the repair,
reconstruction, or replacement of the damaged or destroyed portion of the Facilities. The
Lender shall permit withdrawals from time to time of the proceeds received by Lender
upon receiving the written request of the Borrower, stating that the Borrower has
expended moneys or incurred liabilities in an amount equal to the amount therein
requested to be paid over to it for the purpose of repair, reconstruction or replacement,
and specifying the items for which such moneys were expended or such liabilities were
incurred. Any balance of the proceeds that relate to Property or Facilities not required for
the repair, reconstruction, or replacement thereof shall be applied by the Lender as
provided in Section 4.08(b) hereof.
(b) Alternatively, the Borrower, at its option, and if the proceeds of such
insurance or eminent domain or condemnation awards together with any other moneys
then available are sufficient to prepay the Borrower Loans in full pursuant to Section
4.08(b) hereof, may elect not to repair, reconstruct, or replace the damaged or destroyed
portion of the Facilities, as applicable, and thereupon shall cause the proceeds to be used
for the prepayment of the Borrower Loans.
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(c) There shall be no abatement of Payments during any period in which, by
reason of damage or destruction, there is substantial interference with the use and
occupancy by the Borrower of the Property, the Facilities or any portion thereof.
ARTICLE X
ASSIGNMENT, PARTICIPATION, MORTGAGING AND SELLING
Section 10.01. Assignment by the Lender. This Loan Agreement and related the Issuer
Loan Obligations and the right to receive Payments and the Prepayment Fee from the Borrower
hereunder, may be assigned and reassigned in whole to one assignee by the Lender, at any time,
without the necessity of obtaining the consent of the Issuer or the Borrower; provided, however,
that such assignment or reassignment shall be in accordance with Section 4.09 of this Loan
Agreement. The Issuer and the Borrower agree to execute all documents, including notices of
assignment and chattel mortgages or financing statements, which may be reasonably requested
by the Lender or its assignee to protect its interest in this Loan Agreement. Notwithstanding
anything above to the contrary, all Payments and notices shall be delivered to the Lender. The
Lender agrees to hold any security interests granted hereunder on behalf of any assignee,
subassignee or participant described above.
Section 10.02. No Sale, Assignment or Leasing by the Borrower. This Loan
Agreement and the interest of the Borrower in the Facilities and the Property may not be sold,
assumed, assigned or encumbered by the Borrower other than Liens in favor of the Lender and
the Issuer. No agreement or interest therein and no improvement shall be subject to involuntary
assignment, lease, transfer or sale or to assignment, lease, transfer or sale by operation of law in
any manner whatsoever except (i) as expressly provided in this Loan Agreement, or (ii)
Permitted Encumbrances, and any such attempted assignment, lease, transfer or sale shall be void
and of no effect and shall, at the option of the Lender, constitute an Event of Default hereunder.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
Section 11.01. Events of Default. Upon the expiration of any applicable cure period
expressly provided in this Loan Agreement, each of the following shall constitute an “Event of
Default” under this Loan Agreement:
(a) failure by the Borrower to pay to the Lender, as assignee of the Issuer (i)
any Payment when due, or (ii) any Additional Payment or any other amount required to
be paid hereunder or under any of the other Loan Documents within five (5) days of the
due date thereof;
(b) failure by the Borrower to pay any payment required to be paid under any
other material agreement between the Lender or any of its affiliates and the Borrower,
subject to the applicable cure period set forth in such agreement;
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(c) failure by the Borrower to maintain insurance in accordance with Section
7.04 hereof, except for failures that are immaterial and are cured within ten (10) Business
Days after receipt of written notice from the Lender to the Borrower;
(d) (i) failure by the Borrower to observe and perform any covenant set forth
in Section 7.08, 7.16, 8.01, 8.02, 8.03, 8.05, 8.06, 8.07, 8.08, 8.10, 8.11, 8.13, 8.14, 8.15
or 8.16 hereof; or (ii) failure by the Borrower to observe and perform any other covenant,
condition or agreement on its part to be observed or performed hereunder for a period of
thirty (30) days after the earlier of (i) the date written notice is given to the Borrower by
the Lender, specifying such failure and requesting that it be remedied or (ii)the Borrower
having actual knowledge of any such failure; provided, however, if such failure is
correctable but cannot be corrected within the applicable period and corrective action is
instituted by the Borrower within the applicable period and diligently pursued until
corrected, then no Event of Default shall be deemed to have occurred unless such cure
has not been completed within sixty (60) days after the earlier date set forth above (or
such longer period as may be permitted by the Lender in writing);
(e) (i) the Borrower shall have entered involuntarily against it an order for
relief under the United States Bankruptcy Code, as amended or (ii) initiation by the
Borrower or by any other Person of a proceeding under any Federal or State bankruptcy
or insolvency law seeking relief under such laws concerning the indebtedness of the
Borrower which proceeding is not dismissed or stayed within sixty (60) days;
(f) the Borrower shall be or become insolvent, or shall note pay, or be unable
to pay, or admit in writing its inability to pay its or his debts as they mature, or make an
assignment for the benefit of creditors; or the Borrower shall apply for, seek, consent to,
or acquiesce in, the appointment of any receiver, trustee or similar officer for it or for all
or any substantial part of its property; or such receiver, trustee or similar officer shall be
appointed forth Borrower or any substantial part of its property without the application or
consent of the Borrower or the Borrower shall institute (by petition, application, answer,
consent or otherwise) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or similar proceeding relating to it under the
laws of any jurisdiction or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it ; or any such proceeding shall be
instituted (by petition, application or otherwise) against the Borrower and remains
undismissed or unstayed for sixty (60) days; or any judgment, writ, warrant of attachment
or execution or similar process shall be issued or levied against a substantial part of the
property of the Borrower; or the Borrower shall take any corporate action in furtherance
of any of the matters described above;
(g) the making of any order or the entry of any decree by a court of competent
jurisdiction enjoining construction of the Improvements or enjoining or prohibiting the
Borrower from performing or satisfying its material covenants, obligations or conditions
contained herein and such proceedings are not discontinued or such order or decree is not
vacated within thirty (30) days after the making or granting thereof;
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(h) the service upon the Lender, in accordance with the laws of the
jurisdiction in which the Project is located, of a bonded stop notice from the Borrower
and within ten (10) business days after the Lender’s receipt of such notice either (i) the
claim set forth therein is not discharged by the Borrower or (ii) if the amount claimed is
disputed in good faith by the Borrower or the General Contractor, the Borrower fails to
deliver to the Lender a stop notice release bond, in form and substance and issued by a
surety company acceptable to the Lender, insuring the Lender against such claim;
(i) the Borrower (i) is determined by the Lender to have made any material
false or misleading statement or representation in connection with this Loan Agreement;
or (ii) sells, assigns, leases, or otherwise transfers or encumbers all or any part of its
interest in this Loan Agreement, the Improvements, the Facilities or the Property, other
than Permitted Encumbrances or in accordance with Section 8.02 hereof;
(j) the occurrence of a default or event of default with respect to any
indebtedness or Swap Agreement of the Borrower outstanding in the amount of $100,000
or more under any instrument, agreement or other document evidencing or relating to any
indebtedness, Swap Agreement or other monetary obligation of the Borrower after giving
effect to any grace or cure periods applicable under such instruments, agreements or
documents; provided, however, nothing herein shall preclude the Borrower’s right to
contest in good faith by appropriate proceedings any default or event of default;
(k) the sale of the Borrower to, or merger of the Borrower into, any person, or
the merger of any other person into the Borrower, or acquisition (in a transaction
analogous in purpose or effect to a consolidation or merger) of all or substantially all of
the assets of any other person by the Borrower, or another similar material event, without
the prior written consent of the Lender, other than as expressly permitted pursuant to
Section 8.02 or 8.03 hereof;
(l) the occurrence of a default or event of default under any material lease or
other agreement relating to, affecting or pertaining to the possession or use of any of the
Property, after the expiration of any applicable cure period related thereto;
(m) the occurrence of a default or event of default under any material
agreements or arrangements entered into by the Borrower involving any form of credit
accommodations, after the expiration of any applicable cure period related thereto;
(n) this Loan Agreement or any Loan Document, including any pledge or
collateral security for the Borrower Loans, shall be repudiated by the Borrower or any
material provision in any Loan Document shall become unenforceable or incapable of
performance in accordance with its terms;
(o) any judgment, writ, warrant of attachment or execution or similar process
shall be issued or levied against the Borrower or its assets in excess of $250,000 which is
not covered by insurance or which exceeds any applicable insurance policy by more than
$250,000; provided, however, nothing herein shall preclude the Borrower’s right to
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contest in good faith by appropriate proceedings any such judgment, writ, warrant of
attachment or execution or similar process;
(p) the occurrence of an event of default under the Project Fund Disbursement
Agreement or any other Loan Document;
(q) the occurrence of an event of default under any of the other material
agreement between the Borrower and the Lender after the expiration of any applicable
cure period thereunder;
(r) the Borrower or any member of its Controlled Group shall fail to pay
when due an amount or amounts aggregating not less than $100,000 which it shall have
become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or to the extent
it could reasonably be expected to result in a liability to the Corporation or a member of
its Controlled Group in excess of $100,000, (i) an ERISA Event occurs; (ii) a Plan of the
Borrower or a member of the Controlled Group fails to comply with ERISA or other laws
to the extent applicable thereto; (iii) the Unfunded Vested Liability of the Borrower or a
member of the Controlled Group increases; or (iv) a condition exists or an event or a
transaction occurs with respect to a Plan that results in a liability, fine or penalty;
(s) any lien or security interest granted under the Deed of Trust loses validity
or priority; or
(t) an adverse change shall have occurred with respect to the Borrower’s
financial condition or business which materially impairs the Borrower’s ability to satisfy
its payment obligations under the Loan Documents.
Section 11.02. Remedies on Default. Whenever any Event of Default shall have
occurred and be continuing, the Lender shall have the right, at its sole option without any further
demand or notice, to take any one or any combination of the following remedial actions insofar
as the same are available to secured parties under the laws of the State from time to time and
which are otherwise accorded to the Lender:
(a) by notice to the Issuer and the Borrower, declare the entire unpaid
principal amount of the Borrower Loans (and the related Issuer Loan Obligations) then
outstanding, all interest accrued and unpaid thereon and all amounts payable under this
Loan Agreement to be forthwith due and payable, whereupon such Borrower Loans (and
the related Issuer Loan Obligations), all such accrued interest and all such amounts shall
become and be forthwith due and payable, without presentment, notice of dishonor,
protest or further notice of any kind, all of which are hereby expressly waived by the
Borrower and the Issuer;
(b) the obligation, if any, of the Lender to extend any further credit under any
of the Loan Documents shall immediately cease and terminate;
(c) exercise all rights and remedies legally available to the Lender;
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(d) proceed by appropriate court action to enforce performance by the Issuer
or the Borrower of the applicable covenants of the Loan Documents or to recover for the
breach thereof, including the payment of all amounts due from the Borrower, in which
event the Borrower shall pay or repay to the Lender all costs of such action or court
action including without limitation, reasonable attorneys’ fees;
(e) to enforce its rights, in which event the Borrower shall pay or repay to the
Lender and the Issuer all costs of such action or court action, including, without
limitation, reasonable attorneys’ fees;
(f) take possession of the Property and continue construction of the Project;
and
(g) initiate foreclosure under the Deed of Trust on the Property in any manner
available under law;
All proceeds derived from the exercise of any rights and remedies shall be applied in the
following manner:
FIRST, to pay the Issuer any the Issuer Fees and Expenses;
SECOND, to the United States any rebatable arbitrage due or accrued pursuant to
Section 148(f)(4) of the Code;
THIRD, to pay (a) to the Lender the amount of all unpaid Payments, if any, which
are then due and owing, together with interest and late charges thereon; and (b) to
the Lender any Additional Payments payable to the Lender hereunder;
FOURTH, to pay all proper and reasonable costs and expenses associated with the
recovery, repair, storage and sale of the Collateral, including reasonable
attorneys’ fees and expenses; and
FIFTH, to pay the remainder of any such proceeds, purchase moneys or other
amounts paid by a buyer of the Collateral or other person, to the Borrower.
Notwithstanding any other remedy exercised hereunder, the Borrower shall remain
obligated to pay to the Lender and the Issuer, as their interests may appear, any unpaid Payments
and Additional Payments. To the extent permitted by applicable law, the Borrower hereby
waives any rights now or hereafter conferred by statute or otherwise which might require the
Lender to use, sell, lease or otherwise dispose of the Facilities in mitigation of the Lender’s
damages or which might otherwise limit or modify any of the Lender’s rights hereunder.
All rights, powers and remedies of the Lender may be exercised at any time by the
Lender, as assignee of the Issuer, and from time to time after the occurrence and continuance of
an Event of Default, are cumulative and not exclusive, and shall be in addition to any other
rights, powers or remedies provided by law or equity.
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The Borrower shall pay or repay to the Lender and the Issuer all costs of such action or
court action, including, without limitation, reasonable attorneys’ fees.
Section 11.03. The Lender’s Right to Perform the Obligations. If the Borrower shall
fail, refuse or neglect to make any payment or perform any act required by the Loan Documents
to which it is a party, then while any Event of Default exists, and without notice to or demand
upon the Borrower and without waiving or releasing any other right, remedy or recourse the
Lender may have because of such Event of Default, the Lender may (but shall not be obligated
to) make such payment or perform such act for the account of and at the expense of the Borrower
and interest on such payment shall accumulate from the date of the advance at the Default Rate
until such advance is paid, and shall have the right to enter upon the Facilities or the Property for
such purpose and to take all such action thereon and with respect to the Facilities and the
Property as it may deem necessary or appropriate. If the Lender shall elect to pay any sum due
with reference to the Facilities or the Property, as applicable, the Lender may do so in reliance on
any bill, statement or assessment procured from the appropriate governmental authority or other
issuer thereof without inquiring into the accuracy or validity thereof. Similarly, in making any
payments to protect the security intended to be created by this Loan Agreement or the Deed of
Trust, the Lender shall not be bound to inquire into the validity of any apparent or threatened
adverse title, lien, encumbrance, claim or charge before making an advance for the purpose of
preventing or removing the same. Additionally, if any Hazardous Materials affect or threaten to
affect the Facilities or the Property, the Lender may (but shall not be obligated to) give such
notices and take such actions as it deems necessary or advisable in order to abate the discharge of
any Hazardous Materials or remove the Hazardous Materials. The Borrower shall indemnify,
defend and hold the Lender and the Issuer harmless from and against any and all losses,
liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements of any kind or nature whatsoever, including reasonable attorneys’ fees, incurred or
accruing by reason of any acts performed by the Lender pursuant to the provisions of this
Section, except as a result of the Lender’s gross negligence or willful misconduct.
Section 11.04. No Remedy Exclusive. No remedy herein conferred upon or reserved to
the Lender is intended to be exclusive and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Loan Agreement or now or hereafter existing at
law or in equity. No delay or omission to exercise any right or power accruing upon any Event
of Default shall impair any such right or power or shall be construed to be a waiver thereof, but
any such right or power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Lender to exercise any remedy reserved to it in this Article, it
shall not be necessary to give any notice other than such notice as may be required by this Article
XI. All remedies hereby conferred upon or reserved to the Lender shall survive the termination
of this Loan Agreement.
ARTICLE XII
MISCELLANEOUS
Section 12.01. Disclaimer of Warranties. THE LENDER AND THE ISSUER MAKE
NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE
VALUE, DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY OF MATERIALS
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OR WORKMANSHIP, CONDITION, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR
COPYRIGHT INFRINGEMENTS, TITLE OR FITNESS FOR USE OF THE PROPERTY OR
THE FACILITIES, OR ANY COMPONENT THEREOF OR ANY OTHER WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT THERETO AND, AS TO
THE LENDER AND THE ISSUER. All such risks, as between the Lender, the Issuer and the
Borrower, are to be borne by the Borrower. Without limiting the foregoing the Lender and the
Issuer shall have no responsibility or liability to the Borrower or any other person with respect to
any of the following: (a) any liability, loss or damage caused or alleged to be caused directly or
indirectly by the Facilities or the Property, any inadequacy thereof, any deficiency or defect
(latent or otherwise) therein, or any other circumstances in connection therewith; (b) the use,
operation or performance of the Facilities or the Property or any risks relating thereto; (c) any
interruption of service, loss of business or anticipated profits or consequential damages; or (d)
the delivery, operation, servicing, maintenance, repair, improvement or replacement of the
Facilities. If, and so long as, no default exists under this Loan Agreement, the Borrower shall be,
and hereby is, authorized to assert and enforce, at the Borrower’s sole cost and expense, from
time to time, whatever claims and rights the Borrower or the Lender may have against any prior
title holder or possessor of the Facilities. In no event shall the Lender or the Issuer be liable for
any loss or damage in connection with or arising out of this Loan Agreement or the Facilities.
Section 12.02. Limitations of Liability. In no event, whether as a result of breach of
contract, warranty, tort (including negligence or strict liability), indemnity or otherwise, shall the
Lender, its assignees, if any, or the Issuer (including their respective employees, directors,
officers and agents) be liable for any special, consequential, incidental or punitive damages
including, but not limited to, a loss of profit or revenue, loss of use of the Facilities or any
associated equipment, service materials or software, damage to associated equipment, service
materials or software, cost of capital, cost of substitute equipment, service materials or software,
facilities, services or replacement power, down time costs or claims of the Borrower’s members
for such damages and the Borrower shall indemnify and hold harmless the Lender, its assignees,
if any, and the Issuer (including their respective employees, directors, officers and agents) from
any such damages.
Section 12.03. Additional Payments to the Lender. The Borrower shall pay to the
Lender the following Additional Payments hereunder, in addition to the Payments payable by the
Borrower, in such amounts in each year as shall be required by the Lender in payment of any
reasonable costs and expenses, incurred by the Lender in connection with the execution,
performance or enforcement of this Loan Agreement, the financing and refinancing of the
Project, including but not limited to payment of all reasonable fees, costs and expenses and all
reasonable administrative costs of the Lender in connection with the Project, reasonable expense
(including, without limitation, reasonable attorneys’ fees and disbursements) reasonable fees of
auditors, financial consultants, construction consultants or attorneys, insurance premiums not
otherwise paid hereunder and all other reasonable, direct and necessary administrative costs of
the Lender or charges required to be paid by it in order to comply with the terms of, or to enforce
its rights under, this the Loan Documents. Such Additional Payments shall be billed to the
Borrower by the Lender from time to time, together with a statement certifying that the amount
so billed has been paid or incurred by the Lender for one or more of the items described, or that
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such amount is then payable by the Lender for such items. Amounts so billed shall be due and
payable by the Borrower within 30 days after receipt of the bill by the Borrower.
Section 12.04. Notices. All notices, certificates, requests, demands and other
communications provided for hereunder or under this Loan Agreement shall be in writing and
shall be (a) personally delivered; (b) sent by registered class United States mail; (c) sent by
overnight courier of national reputation; or (d) transmitted by telecopy, in each case addressed to
the party to whom notice is being given at its address as set forth below and, if telecopied,
transmitted to that party at its telecopier number set forth below and confirmed by telephone at
the telephone number set forth below or, as to each party, at such other address or telecopier
number as may hereafter be designated by such party in a written notice to the other party
complying as to delivery with the terms of this Section. All such notices, requests, demands and
other communications shall be deemed to have been given on (i) the date received if personally
delivered; (ii) when deposited in the mail if delivered by mail; (iii) the date sent if sent by
overnight courier; or (iv) the date of transmission if delivered by telecopy. If notice to the
Borrower of any intended disposition of the Facilities or any other intended actions is required
by law in a particular instance, such notice shall be deemed commercially reasonable if given (in
the manner specified in this Section) at least 10 calendar days prior to the date of intended
disposition or other action.
If to the Borrower: St. Augustine’s School of San Diego
3266 Nutmeg Street
San Diego, California 92104
Attention: Executive Director of Finance and Facilities
Telephone: (619) 282-2184
Facsimile: (619) 230-4935
If to the Issuer: California Enterprise Development Authority
550 Bercut Drive, Suite G
Sacramento, California 95811
Attention: Chair
Telephone: (916) 448-8252
Facsimile: (916) 448-3811
With a copy to:
Kutak Rock LLP
777 South Figueroa Street, Suite 4550
Los Angeles, California 90017
Attention: Sam S. Balisy
Telephone: (213) 312-4000
Facsimile: (213) 312-4001
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If to the Lender: MUFG Union Bank, N.A.,
4660 La Jolla Village Drive, Suite 400
San Diego, California 92122
Attention: Dan Finster
Telephone: (858) 812-3652
Facsimile: (858) 909-0452
Section 12.05. Binding Effect; Time of the Essence. This Loan Agreement shall inure
to the benefit of and shall be binding upon the Lender, the Issuer, the Borrower and their
respective successors and assigns, if any. Time is of the essence.
Section 12.06. Severability. In the event any provision of this Loan Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
Section 12.07. Amendments. To the extent permitted by law, the terms of this Loan
Agreement shall not be waived, altered, modified, supplemented or amended in any manner
whatsoever except by written instrument signed by the parties hereto, and then such waiver,
consent, modification or change shall be effective only in the specific instance and for the
specific purpose given; provided, however, that the consent of the Issuer shall not be required for
waivers, alternations, modifications, supplements or amendments of or with respect to Section
7.07, 7.14, 7.16, 7.17, 8.01, 8.04, 8.06 or 8.11 of this Loan Agreement; provided further,
however, that prior to the effectiveness of any such waiver, alteration, modification, supplement
or amendment, an opinion of Special Counsel shall be delivered to the Issuer to the effect that
such waiver, alteration, modification, amendment or supplement complies with the requirements
of this Loan Agreement and that such amendment or supplement will not cause interest on the
Issuer Loan Obligations to be included in the gross income of the Lender for federal income tax
purposes.
Section 12.08. Execution in Counterparts. This Loan Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall constitute one and
the same instrument and any of the parties hereto may execute this Loan Agreement by signing
any such counterpart.
Section 12.09. Applicable Law. This Loan Agreement is a contract made under the
laws of the State of California and shall be governed by and construed in accordance with the
Constitution and laws applicable to contracts made and performed in the State of California.
This Loan Agreement shall be enforceable in the State of California, and any action arising out
of this Loan Agreement shall be filed and maintained in Sacramento County, California.
Section 12.10. Jury Trial Waiver. TO THE EXTENT PERMITTED BY LAW, THE
LENDER AND BORROWER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO JURY
TRIAL OF ANY ACTION, PROCEEDING OR HEARING (HEREINAFTER, A “CLAIM”)
BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS LOAN
AGREEMENT OR ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN
LENDER OR BORROWER RELATING TO THE SUBJECT MATTER OF THE
TRANSACTIONS CONTEMPLATED BY THIS LOAN AGREEMENT OR ANY RELATED
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TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
BETWEEN THE LENDER AND BORROWER. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS). THIS WAVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS LOAN AGREEMENT, ANY RELATED DOCUMENTS, OR TO
ANY OTHER DOCUMENTS OR SUPPLEMENTS RELATING TO THE TRANSACTIONS
CONTEMPLATED BY THIS LOAN AGREEMENT OR ANY RELATED TRANSACTIONS.
IN THE EVENT OF LITIGATION, THIS LOAN AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
Section 12.11. Captions. The captions or headings in this Loan Agreement are for
convenience only and in no way define, limit or describe the scope or intent of any provisions or
sections of this Loan Agreement.
Section 12.12. Entire Agreement. Except as expressly stated herein, this Loan
Agreement, together with the exhibits and attachments hereto and thereto, together with the other
Loan Documents, constitutes the entire agreement among the Lender, the Issuer and the
Borrower. Except as expressly stated herein, there are no understandings, agreements,
representations or warranties, express or implied, not specified herein or therein regarding this
Loan Agreement or the Project financed hereunder. Any terms and conditions of any purchase
order or other document submitted by the Borrower in connection with this Loan Agreement
which are in addition to or inconsistent with the terms and conditions of this Loan Agreement
will not be binding on the Lender and will not apply to this Loan Agreement.
Section 12.13. Waiver. The Lender’s or the Issuer’s failure to enforce at any time or for
any period of time any provision of this Loan Agreement shall not be construed to be a waiver of
such provision or of the right of the Lender or the Issuer thereafter to enforce each and every
provision. No express or implied waiver by the Lender of any Default or remedy of Default shall
constitute a waiver of any other Default or remedy of Default or a waiver of any the Lender’s
rights.
Section 12.14. Survivability. All of the limitations of liability, indemnities and waivers
contained in this Loan Agreement shall continue in full force and effect notwithstanding the
expiration or early termination of this Loan Agreement and are expressly made for the benefit of,
and shall be enforceable by, the Lender and the Issuer, or their successors and assigns.
Section 12.15. Usury. It is the intention of the parties hereto to comply with any
applicable usury laws; accordingly, it is agreed that, notwithstanding any provisions to the
contrary in this Loan Agreement, in no event shall this Loan Agreement require the payment or
permit the collection of interest or any amount in the nature of interest or fees in excess of the
maximum permitted by applicable law.
72
Section 12.16. Third Party Beneficiary. It is the intention of the parties that any
Lender hereunder be a third party beneficiary of this Loan Agreement.
Section 12.17. Further Assurance and Corrective Instruments. The parties hereto
hereby agree that they will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such further acts, instruments, conveyances, transfers
and assurances, as any of them reasonably deems necessary or advisable for the implementation,
correction, confirmation or perfection of this Loan Agreement or the Tax Regulatory Agreement
and any rights of such party hereunder or thereunder.
Section 12.18. Dispute Resolution; Provisional Remedies.
(a) Judicial Reference. In the event the jury trial waiver provisions set forth
in Section 12.10 are not permitted for any reason and the Borrower fails to waive jury
trial, Lender and the Borrower hereby agree: (i) each Claim (as defined in Section 12.10
hereof) shall be determined by a consensual general judicial reference (the “Reference”)
pursuant to the provisions of Section 638 et seq. of the California Code of Civil
Procedure, as such statutes may be amended or modified from time to time; (ii) upon a
written request, or upon an appropriate motion by either the Lender or the Borrower, as
applicable, any pending action relating to any Claim and every Claim shall be heard by a
single Referee (as defined below) who shall then try all issues (including any and all
questions of law and questions of fact relating thereto), and issue findings of fact and
conclusions of law and report a statement of decision. The Referee’s statement of
decision will constitute the conclusive determination of the Claim. The Lender and the
Borrower agree that the Referee shall have the power to issue all legal and equitable
relief appropriate under the circumstances before the Referee; (iii) the Lender and the
Borrower shall promptly and diligently cooperate with one another, as applicable, and the
Referee, and shall perform such acts as may be necessary to obtain prompt and
expeditious resolution of all Claims in accordance with the terms of this Section 12.18;
(iv) either the Lender or the Borrower, as applicable, may file the Referee’s findings,
conclusions and statement with the clerk or judge of any appropriate court, file a motion
to confirm the Referee’s report and have judgment entered thereon. If the report is
deemed incomplete by such court, the Referee may be required to complete the report
and resubmit it; (v) the Lender and the Borrower, as applicable, will each have such
rights to assert such objections as are set forth in Section 638 et seq. of the California
Code of Civil Procedure; and (vi) all proceedings shall be closed to the public and
confidential, and all records relating to the Reference shall be permanently sealed when
the order thereon becomes final.
(b) Selection of Referee; Powers. The parties to the Reference proceeding
shall select a single neutral referee (the “Referee”), who shall be a retired judge or justice
of the courts of the State of California, or a federal court judge, in each case, with at least
ten (10) years of judicial experience in civil matters. The Referee shall be appointed in
accordance with Section 638 of the California Code of Civil Procedure (or pursuant to
comparable provisions of federal law if the dispute falls within the exclusive jurisdiction
of the federal courts). If within ten (10) days after the request or motion for the
Reference, the parties to the Reference proceeding cannot agree upon a Referee, then any
73
party to such proceeding may request or move that the Referee be appointed by the
Presiding Judge of the Superior Court of the County of San Diego, or of the U.S. District
Court for the Southern District of California. The Referee shall determine all issues
relating to the applicability, interpretation, legality and enforceability of this Section
12.18(b).
(c) Provisional Remedies, Self Help and Foreclosure. No provision of this
Section 12.18 shall limit the right of either the Lender, the Issuer, or the Borrower, as the
case may be, to (i) exercise such self-help remedies as might otherwise be available under
applicable law, (ii) initiate judicial or non-judicial foreclosure against any personal
property collateral, (iii) exercise any judicial or power of sale rights, or (iv) obtain or
oppose provisional or ancillary remedies, including without limitation injunctive relief,
writs of possession, the appointment of a receiver, and/or additional or supplementary
remedies from a court of competent jurisdiction before, after, or during the pendency of
any Reference. The exercise of, or opposition to, any such remedy does not waive the
right of the Lender or the Borrower to the Reference pursuant to this Section 12.18(c).
(d) Costs and Fees. Promptly following the selection of the Referee, the
parties to such Reference proceeding shall each advance equal portions of the estimated
fees and costs of the Referee. In the statement of decision issued by the Referee, the
Referee shall award costs, including reasonable attorneys’ fees, to the prevailing party, if
any, and may order the Referee’s fees to be paid or shared by the parties to such
Reference proceeding in such manner as the Referee deems just.
Section 12.19. Arm’s Length Transaction. The Borrower acknowledges and agrees
that (i) the advance of the Loans by the Lender pursuant to this Loan Agreement is an arm’s-
length commercial transaction between the Borrower and the Lender, (ii) in connection therewith
and with the financing discussions, undertakings and procedures leading up to the consummation
of such transaction, the Lender is and has been acting solely as a principal and is not acting as the
agent or fiduciary of or in any way advising the Borrower, (iii) the Lender has not assumed an
advisory or fiduciary responsibility in favor of the Borrower with respect to the financing
contemplated hereby or the discussions, undertakings and procedures leading thereto
(irrespective of whether the Lender has provided other services or is currently providing other
services to the Borrower on other matters) and the Lender has no obligation to the Borrower with
respect to the financing contemplated hereby except the obligations expressly set forth in this
Loan Agreement and (iv)the Borrower has consulted its own legal, financial and other advisors
to the extent it has deemed appropriate.
Section 12.20. Patriot Act. The Lender hereby notifies the Borrower that pursuant to
the requirements of the Patriot Act it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the Borrower and
other information that will allow the Lender to identify the Borrower in accordance with the
Patriot Act. The Borrower hereby agrees that it shall promptly provide such information upon
request by the Lender.
[Remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Master Loan Agreement to
be executed in their respective corporate names by their duly authorized officers or officials all
as of the date first written above.
LENDER:
MUFG UNION BANK, N.A.
By____________________________________
Dan Finster, Vice President
ISSUER:
CALIFORNIA ENTERPRISE
DEVELOPMENT AUTHORITY
By Gurbax Sahota, Chair
Attest:
By
Helen Schaubmayer, Assistant Secretary
BORROWER:
ST. AUGUSTINE’S SCHOOL
OF SAN DIEGO
By____________________________________
Rev. Fr. Kevin Mullins, OSA,
Prior Provincial of the Province of
St. Augustine in California
By____________________________________
Steve Chipp, Executive Director of
Finance and Facilities
[Signature Page to Master Loan Agreement]
A-1
EXHIBIT A
PROPERTY DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
Parcel 1 of Parcel Map 16815, in the City of San Diego, County of San Diego, State of California, filed in the Office
of the County Recorder of San Diego County, March 31, 1992, as instrument no. 1992-0183174 of Official Records.
Assessor’s Parcel No. 453-682-05-00
.
B-1
EXHIBIT B
FORM OF INVESTOR LETTER
California Enterprise Development Authority
Sacramento, California
Kutak Rock LLP
Los Angeles, California
St. Augustine’s School of San Diego
San Diego, California
Re: Master Loan Agreement, dated as of October 1, 2015, by and among MUFG
Union Bank, N.A., California Enterprise Development Authority and St.
Augustine’s School of San Diego.
Ladies and Gentlemen:
The undersigned, MUFG Union Bank, N.A., a California corporation (the “Lender”), has
entered into the Master Loan Agreement, dated as of October 1, 2015 (the “Loan Agreement”),
with the California Enterprise Development Authority (the “Issuer”) and St. Augustine’s School
of San Diego, a California nonprofit religious corporation (the “Borrower”). Pursuant to the
Loan Agreement, the Lender is making two loans in the aggregate principal amount of up to
$23,500,000 (the “Issuer Loans”) to the Issuer and the Issuer will simultaneously make two loans
to the Borrower (the “Borrower Loans”), all pursuant to the terms and provisions of the Loan
Agreement. The undersigned hereby represents and warrants to you that:
The undersigned hereby represents and warrants to you that:
1. The Lender has authority to make the Issuer Loans pursuant to the Loan
Agreement and to execute this letter and any other instruments and documents required to be
executed by the Lender in connection with the Issuer Loans.
2. The Lender is a “Qualified Institutional Buyer” and has sufficient knowledge and
experience in financial and business matters, including purchase and ownership of municipal and
other tax-exempt obligations and is capable of evaluating the merits and risks of its investment
represented by the Issuer Loans, the Borrower Loans and the Loan Agreement. The Lender is
able to bear the economic risk of, and entire loss of, an investment in the Issuer Loans. The
definition of Qualified Institutional Buyer is attached hereto.
3. The Issuer Loans are being provided by the Lender for investment purposes and
not with a view to, or for resale in connection with, any distribution of the Issuer Loans, and the
Lender presently intends to hold the Issuer Loans for its own account and for an indefinite period
of time, and do not intend at this time to dispose of all or any part of the Issuer Loans. The
Lender understands that it may need to bear the risks of this investment for an indefinite time,
since any transfer prior to maturity may not be possible.
B-2
4. The Lender understands that the Loan Agreement is not registered under the 1933
Act; and further understands that the Issuer Loans (a) is not being registered or otherwise
qualified for sale under the “Blue Sky” laws and regulations of any state, (b) will not be listed in
any stock or other securities exchange, (c) will not carry a rating from any rating service and
(d) will be delivered in a form which may not be readily marketable. The Lender agrees that it
will comply with any applicable state and federal securities laws then in effect with respect to
any disposition of the Issuer Loans by it and with the Issuer’s resale limitations as set forth in the
Loan Agreement, and further acknowledges that any current exemption from registration of the
Issuer Loans does not affect or diminish such requirements.
5. The undersigned is a duly appointed, qualified and acting officer of the Lender
and is authorized to cause the Lender to make the certificates, representations and warranties
contained herein by execution of this letter on behalf of the Lender.
6. The Lender acknowledges that it has either been supplied with or been given
access to information, including financial statements and other financial information, to which a
reasonable Lender would attach significance in making investment decisions, and the Lender has
had the opportunity to ask questions and receive answers from knowledgeable individuals
concerning the Borrower, the Project, the Issuer Loans and the Borrower Loans and the security
therefor so that, as a reasonable investor, the Lender has been able to make a decision to provide
the Issuer Loans. The Lender acknowledges that it has not relied upon the Issuer for any
information in connection with the Lender providing the Issuer Loans or with the Loan
Documents.
7. The Lender acknowledges that the obligations of the Issuer to make loan
payments with respect to the Issuer Loans are special, limited obligations payable solely from the
Payments (as defined in the Loan Agreement) and any other amounts paid to the Issuer from the
Borrower pursuant to the terms of the Loan Agreement and the Issuer shall not be directly or
indirectly or contingently or morally obligated to use any other moneys or assets of the Issuer for
all or any portion of such loan payments.
8. The Lender has made its own inquiry and analysis with respect to the Issuer
Loans, the Borrower Loans and the security therefor, and other material factors affecting the
security and payment of the Issuer Loans and the Borrower Loans. The Lender is aware that the
business of the Borrower involves certain economic variables and risks that could adversely
affect the security for the Issuer Loans and the Borrower Loans.
9. The Lender acknowledges that its right to sell and transfer the Issuer Loans is
subject to compliance with the transfer restrictions set forth in the Loan Agreement, including
the requirement of the delivery to the Issuer and the Borrower of an investor’s letter from the
transferee to substantially the same effect as this Investor Letter, with no revisions except as may
be approved in writing by the Issuer. Failure to deliver such letter to the Issuer and the Borrower
shall cause the purported transfer to be null and void. The Lender agrees to indemnify and hold
harmless the Issuer with respect to any claim asserted against the Issuer that is based upon the
sale, transfer or other disposition of the Issuer Loans in violation of the provisions hereof.
B-3
10. Neither Kutak Rock LLP (“Special Counsel”) nor the Issuer, their members,
governing body, or any of their employees, counsel or agents will have any responsibility to the
Lender for the accuracy or completeness of information obtained by the Lender from any source
regarding the Borrower or its financial condition, or regarding the ability of the Borrower to pay
the Borrower Loans, or the sufficiency of any security therefore. No written information has
been provided by the Issuer to the Lender with respect to the Borrower Loans. The Lender
acknowledges that, as between the Lender and all of such parties, the Lender has assumed
responsibility for obtaining such information and making such review as the Lender deemed
necessary or desirable in connection with its decision to provide the Issuer Loans.
[Paragraphs 11-14 only apply to the initial Lender.]
11. The Issuer Loans are being provided in a direct, private placement transaction and
the terms of the Issuer Loans have been established through negotiations between the Lender, the
Borrower and the Issuer in an arm’s-length transaction.
12. The aggregate price, established as described above, for the Issuer Loans, to be
paid by Lender pursuant to the terms of this letter and the Loan Agreement, is an amount equal
to 100% of the aggregate principal amount of the Issuer Loans.
13. As of the date hereof, the price at which the Lender agreed to provide the Issuer
Loans was, the entire principal amount of the Issuer Loans. The Lender acknowledges that such
price will be relied on by Special Counsel as the “issue price” for establishing the yield on the
Issuer Loans, for issuance cost limitations and other federal tax requirements based upon the
issue price of the Issuer Loans.
14. If the Lender transfers, sells or disposes of the Issuer Loans, or any interest in the
Issuer Loans, other than to the Affiliate, either (a) such transfer of any interest in the Issuer
Loans will not occur within 60 days of the date hereof, during which time the Issuer Loans will
be held exclusively for our own account and not subject to contractual arrangement for such
transfer, or (b) such transfer of the Issuer Loans, or interest therein, will be at a price or prices
that, in the aggregate (and taking into account any interest in the Issuer Loans not transferred), is
not in excess of par, unless Special Counsel provides a written opinion that the failure to satisfy
this paragraph will not adversely affect the exclusion from gross income of interest on the Issuer
Loans.
We understand that the foregoing information will be relied upon by the Issuer and the
Borrower with respect to certain representations in the Tax Regulatory Agreement dated as of the
date hereof or the Exhibits thereto and by Special Counsel in connection with its opinion as to
the exclusion of the interest on the Issuer Loans from gross income for Federal income tax
purposes under Section 103 of the Internal Revenue Code of 1986, as amended.
Very truly yours,
B-4
Attachment to Investor Letter
Exhibit B–1
Qualified Institutional Buyer Definition
A “qualified institutional buyer” as defined in Rule 144A promulgated under the
Securities Act of 1933, as in effect on the date hereof, consisting of:
1. Any of the following entities, acting for its own account or the accounts of other
qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at
least $100 million in securities of issuers that are not affiliated with the entity:
(A) Any insurance company as defined in Section 2(13) of the Securities Act
of 1933, as amended;
NOTE: A purchase by an insurance company for one or more of its separate accounts, as
defined by Section 2(a)(37) of the Investment Company Act of 1940 (the “Investment
Company Act”), which are neither registered under Section 8 of the Investment Company
Act nor required to be so registered, shall be deemed to be a purchase for the account of
such insurance company.
(B) Any investment company registered under the Investment Company Act
or any business development company as defined in Section 2(a)(48) of that Act;
(C) Any Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business Investment
Act of 1958;
(D) Any plan established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political subdivisions, for the benefit of
its employees;
(E) Any employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974;
(F) Any trust fund whose trustee is a bank or trust company and whose
participants are exclusively plans of the types identified in paragraph 1(D) or (E) of this
section, except trust funds that include as participants individual retirement accounts or
H.R. 10 plans;
(G) Any business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940;
(H) Any organization described in Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended (the “Code”), corporation (other than a bank as defined in
Section 3(a)(2) of the Securities Act of 1933, as amended, or a savings and loan
association or other institution referenced in Section 3(a)(5)(A) of the Securities Act of
B-5
1933, as amended, or a foreign bank or savings and loan association or equivalent
institution), partnership, or Massachusetts or similar business trust; and
(I) Any investment adviser registered under the Investment Advisers Act.
2. Any dealer registered pursuant to Section 15 of the Securities Exchange Act of
1934, acting for its own account or the accounts of other qualified institutional buyers, that in the
aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers
that are not affiliated with the dealer, provided, that securities constituting the whole or a part of
an unsold allotment to or subscription by a dealer as a participant in a public offering shall not be
deemed to be owned by such dealer.
3. Any dealer registered pursuant to Section 15 of the Securities Exchange Act of
1934 acting in a riskless principal transaction on behalf of a qualified institutional buyer.
NOTE: A registered dealer may act as agent, on a non-discretionary basis, in a transaction with a
qualified institutional buyer without itself having to be a qualified institutional buyer.
4. Any investment company registered under the Investment Company Act, acting
for its own account or for the accounts of other qualified institutional buyers, that is part of a
family of investment companies which own in the aggregate at least $100 million in securities of
issuers, other than issuers that are affiliated with the investment company or are part of such
family of investment companies. “Family of investment companies” means any two or more
investment companies registered under the Investment Company Act, except for a unit
investment trust whose assets consist solely of shares of one or more registered investment
companies, that have the same investment adviser (or, in the case of unit investment trusts, the
same depositor), provided that, for purposes of this section:
(A) Each series of a series company (as defined in Rule 18f 2 under the
Investment Company Act: 17 CFR 270.1 8f-2) shall be deemed to be a separate
investment company; and
(B) Investment companies shall be deemed to have the same adviser (or
depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same
parent, or if one investment company’s adviser (or depositor) is a majority-owned
subsidiary of the other investment company’s adviser (or depositor).
5. Any entity, all of the equity owners of which are qualified institutional buyers,
acting for its own account or the accounts of other qualified institutional buyers.
6. Any bank as defined in Section 3(a)(2) of the Securities Act of 1933, as amended,
any savings and loan association or other institution as referenced in Section 3(a)(5)(A) of the
Securities Act of 1933, as amended, or any foreign bank or savings and loan association or
equivalent institution, acting for its own account or the accounts of other qualified institutional
buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in
securities of issuers that are not affiliated with it and that has an audited net worth of at least $25
million as demonstrated in its latest annual financial statements, as of a date not more than 16
months preceding the date of sale under the rule in the case of a U.S. bank or savings and loan
B-6
association, and not more than 18 months preceding such date of sale for a foreign bank or
savings and loan association or equivalent institution.
In determining the aggregate amount of securities owned and invested on a discretionary
basis by an entity, the following instruments and interests shall be excluded: bank deposit notes
and certificates of deposit; loan participations; repurchase agreements; securities owned but
subject to a repurchase agreement; and currency, interest rate and commodity swaps.
The aggregate value of securities owned and invested on a discretionary basis by an
entity shall be the cost of such securities, except where the entity reports its securities holdings in
its financial statements on the basis of their market value, and no current information with
respect to the cost of those securities has been published. In the latter event, the securities may
be valued at market for purposes of this section.
In determining the aggregate amount of securities owned by an entity and invested on a
discretionary basis, securities owned by subsidiaries of the entity that are consolidated with the
entity in its financial statements prepared in accordance with GAAP may be included if the
investments of such subsidiaries are managed under the direction of the entity, except that, unless
the entity is a reporting company under Section 13 or 15(d) of the Securities Exchange Act of
1934, securities owned by such subsidiaries may not be included if the entity itself is a majority-
owned subsidiary that would be included in the consolidated financial statements of another
enterprise.
For purposes of this section, “riskless principal transaction” means a transaction in which
a dealer buys a security from any person and makes a simultaneous offsetting sale of such
security to a qualified institutional buyer, including another dealer acting as riskless principal for
a qualified institutional buyer.
C-1
EXHIBIT C
MATTERS TO BE ADDRESSED IN OPINION OF COUNSEL OF BORROWER
1. The Borrower is a nonprofit religious corporation, validly existing and in good
standing under the laws of the State of California.
2. Borrower has the corporate power and authority to execute and deliver the Loan
Documents and to perform its obligations thereunder. The Borrower has taken all corporate
action necessary to authorize its execution and delivery of the Loan Documents and the
performance of its obligations thereunder. The Borrower has duly executed and delivered the
Loan Documents. The Borrower has all necessary corporate power and authority to conduct the
business now being conducted by it, as contemplated by the Loan Documents.
3. The Loan Documents constitute the valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their respective terms. Certain
remedies, waivers and other provisions of the Loan Documents are, or may be, unenforceable, in
whole or in part, under certain laws and judicial decisions; however, subject to the assumptions,
qualifications and limitations expressed in this Letter, and except for the economic consequences
resulting from any delay imposed, or any procedure required, by applicable laws, rules,
regulations, court decisions, the Constitution of the State of California and the Constitution of the
United States of America, such unenforceability will not render the Loan Documents invalid as a
whole or preclude the acceleration of the payment obligations under the Loan Agreement upon a
material breach of a material covenant contained in the Loan Documents.
4. The execution and delivery by the Borrower of the Loan Documents, the
consummation of the transactions contemplated therein and the fulfillment of or compliance with
the terms and conditions thereof, do not and will not (a) conflict with or constitute on the part of
the Borrower a violation or breach of or default (with due notice or the passage of time or both)
under (i) the articles of incorporation or bylaws of the Borrower, (ii) any applicable California or
federal statutory law or administrative rule or regulation known to us; (iii) to the best of our
actual knowledge, any applicable court or administrative decree or order which is directed to or
affects the Borrower; or (iv) any material contract, agreement or instrument to which the
Borrower is a party or by which the Borrower or its respective properties is otherwise subject or
bound; or (b) result in the creation or imposition of any prohibited lien, charge or encumbrance
upon any of the property or assets of the Borrower, which conflict, violation, breach, default,
lien, charge or encumbrance might have consequences that would materially and adversely affect
the consummation of the transactions contemplated by the Loan Documents or the financial
condition or operations of the Borrower.
5. The execution and delivery by the Borrower of the Loan Documents does not
require any consent, approval, authorization or other action by, or filing with, (a) any trustee or
holder of any indebtedness of the Borrower or (b) any governmental authority other than those
consents, approvals, authorizations and other actions by, and filings with, any such trustee,
holder or governmental authority that have been obtained, taken or made.
C-2
6. (a) There is no action, suit, proceeding, inquiry or investigation before or by any
court or federal, state, municipal or other governmental authority pending or, to the best of our
actual knowledge, threatened against or affecting the Borrower which, if determined adversely to
the Borrower, would have a material and adverse effect upon the consummation of the
transactions contemplated by or the validity of the Loan Documents, or upon the financial
condition or operations of the Borrower, and (b) the Borrower is not, to the best of our actual
knowledge, in default with respect to any order or decree of any court or any order, regulation or
demand of any federal, state, municipal or other governmental authority, which default might
have consequences that would materially and adversely affect the consummation of the
transactions contemplated by the Loan Documents or the financial condition or operations of the
Borrower.
7. The Borrower is an organization described in Section 501(c)(3) of the United
States Internal Revenue Code of 1986, as amended (the “Code”), and the Borrower is exempt
from federal income taxes under Section 501(a) of the Code, except for unrelated business
income subject to taxation under Section 511 of the Code. We have no current actual knowledge
of any pending proceedings or threatened proceedings before the Internal Revenue Service
(“IRS”) to change such status. As used in this Paragraph 7, the term “pending proceeding”
means a proceeding pending before the IRS that is, to our current actual knowledge, specifically
applicable to the Borrower as a named party. As used in this Paragraph 7, the term “threatened
proceeding “means a written communication actually delivered to the Borrower that overtly
threatens the Borrower with commencement by the sender of a proceeding before the IRS.
Furthermore, we have no current actual knowledge of any information which would indicate that
(1) the Borrower is no longer an organization described in Section 501(c)(3) of the Code, or (2)
the Borrower is in violation of the terms, conditions and limitations set forth in the IRS
determination letter.
8. The Borrower is an organization that the Franchise Tax Board of the State of
California has determined is currently exempt from tax under Section 23701(d) of the California
Revenue and Taxation Code, as amended.
9. Assuming the proceeds of the Loan will be allocated and used as described in the
Tax Agreement, the proceeds of the Loan will not be used by the Borrower in or for any trade or
business the conduct of which is not substantially related to the exercise or performance of the
purposes or functions constituting the basis forth Borrower’s exemption under Section 501(c)(3)
of the Code as determined by applying Section 513(a) of the Code and, therefore, will not be
used by the Borrower in any “unrelated trade or business” within the meaning of Section 513(a).
10. The Deed of Trust is in a form sufficient to create a legal, valid, and perfected lien
on the fee estate of the real property described therein (the “Property”) and the rents thereof in
favor of the trustee under the Deed of Trust for the benefit of the beneficiary identified in the
Deed of Trust. In order to provide constructive notice of any lien created by the Deed of Trust, it
is necessary to record the Deed of Trust in the Official Records of Los Angeles County,
California in accordance with the recording system established pursuant to applicable law. In
rendering the opinion in this Paragraph, we have assumed that the description of the fee estate of
the Property is legally sufficient to enable a subsequent purchaser, beneficiary under a mortgage,
or mortgagee to identify such fee estate. It is not necessary to re-record, re-register, or re-file the
C-3
Deed of Trust or to record, register, or file any other or additional documents, instruments, or
statements in order to maintain the priority of any liens or security interests to be created in the
Property by the Deed of Trust.
11. The Borrower has created under the Deed of Trust a valid security interest in that
portion of the mortgaged property consisting of personal property and fixtures described in the
Deed of Trust in which the Borrower has rights to the extent a valid security interest can be
created under Division 9 of the California UCC in the same (collectively, the “Personal
Property”). Insofar as perfection can be accomplished by recording a fixture filing in the Official
Records of San Diego County, California or by filing a financing statement with the California
Secretary of State pursuant to the California UCC, recording the Deed of Trust in San Diego
County and filing the California Financing Statements with the California Financing Office
constitutes all action is as necessary to perfect the security interest in the Personal Property
granted pursuant to the Deed of Trust. No other filing or recording is necessary or advisable to
continue the perfection of such security interests.
D-1-1
EXHIBIT D-1
SCHEDULE OF SERIES A LOAN PRINCIPAL PAYMENTS
Payment Date Outstanding
Principal
Principal
Amount Due
11/1/2015 10,443,461.66 20,153.33
12/1/2015 10,423,308.33 20,247.37
1/1/2016 10,403,060.96 20,341.86
2/1/2016 10,382,719.10 20,436.79
3/1/2016 10,362,282.31 20,532.16
4/1/2016 10,341,750.15 20,627.98
5/1/2016 10,321,122.17 20,724.24
6/1/2016 10,300,397.93 20,820.95
7/1/2016 10,279,576.98 20,918.12
8/1/2016 10,258,658.86 21,015.73
9/1/2016 10,237,643.13 21,113.81
10/1/2016 10,216,529.32 21,212.35
11/1/2016 10,195,316.97 21,311.33
12/1/2016 10,174,005.64 21,410.78
1/1/2017 10,152,594.86 21,510.70
2/1/2017 10,131,084.16 21,611.09
3/1/2017 10,109,473.07 21,711.94
4/1/2017 10,087,761.13 21,813.25
5/1/2017 10,065,947.88 21,915.06
6/1/2017 10,044,032.82 22,017.32
7/1/2017 10,022,015.50 22,120.08
8/1/2017 9,999,895.42 22,223.29
9/1/2017 9,977,672.13 22,327.01
10/1/2017 9,955,345.12 22,431.20
11/1/2017 9,932,913.92 22,535.88
12/1/2017 9,910,378.04 15,379.81
1/1/2018 9,894,998.23 15,425.69
2/1/2018 9,879,572.54 15,471.71
3/1/2018 9,864,100.83 15,517.87
4/1/2018 9,848,582.96 15,564.16
5/1/2018 9,833,018.80 15,610.60
6/1/2018 9,817,408.20 15,657.17
7/1/2018 9,801,751.03 15,703.88
8/1/2018 9,786,047.15 15,750.73
9/1/2018 9,770,296.42 15,797.72
10/1/2018 9,754,498.70 15,844.85
D-1-2
11/1/2018 9,738,653.85 15,892.12
12/1/2018 9,722,761.73 15,939.53
1/1/2019 9,706,822.20 15,987.08
2/1/2019 9,690,835.12 16,034.78
3/1/2019 9,674,800.34 16,082.62
4/1/2019 9,658,717.72 16,130.60
5/1/2019 9,642,587.12 16,178.72
6/1/2019 9,626,408.40 16,226.98
7/1/2019 9,610,181.42 16,275.40
8/1/2019 9,593,906.02 16,323.95
9/1/2019 9,577,582.07 16,372.65
10/1/2019 9,561,209.42 16,421.50
11/1/2019 9,544,787.92 16,470.49
12/1/2019 9,528,317.43 16,519.62
1/1/2020 9,511,797.81 16,568.91
2/1/2020 9,495,228.90 16,618.34
3/1/2020 9,478,610.56 16,667.92
4/1/2020 9,461,942.64 16,717.64
5/1/2020 9,445,225.00 16,767.52
6/1/2020 9,428,457.48 16,817.54
7/1/2020 9,411,639.94 16,867.71
8/1/2020 9,394,772.23 16,918.03
9/1/2020 9,377,854.20 16,968.50
10/1/2020 9,360,885.70 17,019.13
11/1/2020 9,343,866.57 17,069.90
12/1/2020 9,326,796.67 17,120.83
1/1/2021 9,309,675.84 17,171.90
2/1/2021 9,292,503.94 17,223.13
3/1/2021 9,275,280.81 17,274.52
4/1/2021 9,258,006.29 17,326.05
5/1/2021 9,240,680.24 17,377.74
6/1/2021 9,223,302.50 17,429.58
7/1/2021 9,205,872.92 17,481.58
8/1/2021 9,188,391.34 17,533.74
9/1/2021 9,170,857.60 17,586.04
10/1/2021 9,153,271.56 17,638.51
11/1/2021 9,135,633.05 17,691.13
12/1/2021 9,117,941.92 17,743.91
1/1/2022 9,100,198.01 17,796.85
2/1/2022 9,082,401.16 17,849.94
3/1/2022 9,064,551.22 17,903.19
D-1-3
4/1/2022 9,046,648.03 17,956.60
5/1/2022 9,028,691.43 18,010.17
6/1/2022 9,010,681.26 18,063.90
7/1/2022 8,992,617.36 18,117.79
8/1/2022 8,974,499.57 18,171.85
9/1/2022 8,956,327.72 18,226.06
10/1/2022 8,938,101.66 18,280.43
11/1/2022 8,919,821.23 18,334.97
12/1/2022 8,901,486.26 18,389.67
1/1/2023 8,883,096.59 18,444.53
2/1/2023 8,864,652.06 18,499.56
3/1/2023 8,846,152.50 18,554.75
4/1/2023 8,827,597.75 18,610.10
5/1/2023 8,808,987.65 18,665.62
6/1/2023 8,790,322.03 18,721.31
7/1/2023 8,771,600.72 18,777.16
8/1/2023 8,752,823.56 18,833.18
9/1/2023 8,733,990.38 18,889.37
10/1/2023 8,715,101.01 18,945.72
11/1/2023 8,696,155.29 19,002.24
12/1/2023 8,677,153.05 19,058.93
1/1/2024 8,658,094.12 19,115.79
2/1/2024 8,638,978.33 19,172.82
3/1/2024 8,619,805.51 19,230.02
4/1/2024 8,600,575.49 19,287.39
5/1/2024 8,581,288.10 19,344.93
6/1/2024 8,561,943.17 19,402.64
7/1/2024 8,542,540.53 19,460.52
8/1/2024 8,523,080.01 19,518.58
9/1/2024 8,503,561.43 19,576.81
10/1/2024 8,483,984.62 19,635.22
11/1/2024 8,464,349.40 19,693.79
12/1/2024 8,444,655.61 19,752.55
1/1/2025 8,424,903.06 19,811.48
2/1/2025 8,405,091.58 19,870.58
3/1/2025 8,385,221.00 19,929.86
4/1/2025 8,365,291.14 19,989.32
5/1/2025 8,345,301.82 20,048.95
6/1/2025 8,325,252.87 20,108.77
7/1/2025 8,305,144.10 20,168.76
8/1/2025 8,284,975.34 20,228.93
D-1-4
9/1/2025 8,264,746.41 20,289.28
10/1/2025 8,244,457.13 20,349.81
11/1/2025 8,224,107.32 20,410.52
12/1/2025 8,203,696.80 20,471.41
1/1/2026 8,183,225.39 20,532.48
2/1/2026 8,162,692.91 20,593.74
3/1/2026 8,142,099.17 20,655.17
4/1/2026 8,121,444.00 20,716.80
5/1/2026 8,100,727.20 20,778.60
6/1/2026 8,079,948.60 20,840.59
7/1/2026 8,059,108.01 20,902.76
8/1/2026 8,038,205.25 20,965.12
9/1/2026 8,017,240.13 21,027.67
10/1/2026 7,996,212.46 21,090.40
11/1/2026 7,975,122.06 21,153.32
12/1/2026 7,953,968.74 21,216.43
1/1/2027 7,932,752.31 21,279.73
2/1/2027 7,911,472.58 21,343.21
3/1/2027 7,890,129.37 21,406.88
4/1/2027 7,868,722.49 21,470.75
5/1/2027 7,847,251.74 21,534.80
6/1/2027 7,825,716.94 21,599.05
7/1/2027 7,804,117.89 21,663.48
8/1/2027 7,782,454.41 21,728.11
9/1/2027 7,760,726.30 21,792.94
10/1/2027 7,738,933.36 21,857.95
11/1/2027 7,717,075.41 21,923.16
12/1/2027 7,695,152.25 21,988.57
1/1/2028 7,673,163.68 22,054.17
2/1/2028 7,651,109.51 22,119.96
3/1/2028 7,628,989.55 22,185.95
4/1/2028 7,606,803.60 22,252.14
5/1/2028 7,584,551.46 22,318.52
6/1/2028 7,562,232.94 22,385.11
7/1/2028 7,539,847.83 22,451.89
8/1/2028 7,517,395.94 22,518.87
9/1/2028 7,494,877.07 22,586.05
10/1/2028 7,472,291.02 22,653.44
11/1/2028 7,449,637.58 22,721.02
12/1/2028 7,426,916.56 22,788.80
1/1/2029 7,404,127.76 22,856.79
D-1-5
2/1/2029 7,381,270.97 22,924.98
3/1/2029 7,358,345.99 22,993.37
4/1/2029 7,335,352.62 23,061.97
5/1/2029 7,312,290.65 23,130.77
6/1/2029 7,289,159.88 23,199.78
7/1/2029 7,265,960.10 23,268.99
8/1/2029 7,242,691.11 23,338.41
9/1/2029 7,219,352.70 23,408.03
10/1/2029 7,195,944.67 23,477.87
11/1/2029 7,172,466.80 23,547.91
12/1/2029 7,148,918.89 23,618.16
1/1/2030 7,125,300.73 23,688.62
2/1/2030 7,101,612.11 23,759.29
3/1/2030 7,077,852.82 23,830.18
4/1/2030 7,054,022.64 23,901.27
5/1/2030 7,030,121.37 23,972.57
6/1/2030 7,006,148.80 24,044.09
7/1/2030 6,982,104.71 24,115.82
8/1/2030 6,957,988.89 24,187.77
9/1/2030 6,933,801.12 24,259.93
10/1/2030 6,909,541.19 24,332.31
11/1/2030 6,885,208.88 24,404.90
12/1/2030 6,860,803.98 24,477.70
1/1/2031 6,836,326.28 24,550.73
2/1/2031 6,811,775.55 24,623.97
3/1/2031 6,787,151.58 24,697.43
4/1/2031 6,762,454.15 24,771.12
5/1/2031 6,737,683.03 24,845.02
6/1/2031 6,712,838.01 24,919.14
7/1/2031 6,687,918.87 24,993.48
8/1/2031 6,662,925.39 25,068.04
9/1/2031 6,637,857.35 25,142.83
10/1/2031 6,612,714.52 25,217.84
11/1/2031 6,587,496.68 25,293.07
12/1/2031 6,562,203.61 25,368.53
1/1/2032 6,536,835.08 25,444.21
2/1/2032 6,511,390.87 25,520.12
3/1/2032 6,485,870.75 25,596.26
4/1/2032 6,460,274.49 25,672.62
5/1/2032 6,434,601.87 25,749.21
6/1/2032 6,408,852.66 25,826.03
D-1-6
7/1/2032 6,383,026.63 25,903.07
8/1/2032 6,357,123.56 25,980.35
9/1/2032 6,331,143.21 26,057.86
10/1/2032 6,305,085.35 26,135.60
11/1/2032 6,278,949.75 26,213.57
12/1/2032 6,252,736.18 26,291.77
1/1/2033 6,226,444.41 26,370.21
2/1/2033 6,200,074.20 26,448.88
3/1/2033 6,173,625.32 26,527.79
4/1/2033 6,147,097.53 26,606.93
5/1/2033 6,120,490.60 26,686.31
6/1/2033 6,093,804.29 26,765.92
7/1/2033 6,067,038.37 26,845.77
8/1/2033 6,040,192.60 26,925.86
9/1/2033 6,013,266.74 27,006.19
10/1/2033 5,986,260.55 27,086.76
11/1/2033 5,959,173.79 27,167.57
12/1/2033 5,932,006.22 27,248.62
1/1/2034 5,904,757.60 27,329.91
2/1/2034 5,877,427.69 27,411.44
3/1/2034 5,850,016.25 27,493.22
4/1/2034 5,822,523.03 27,575.24
5/1/2034 5,794,947.79 27,657.51
6/1/2034 5,767,290.28 27,740.02
7/1/2034 5,739,550.26 27,822.78
8/1/2034 5,711,727.48 27,905.78
9/1/2034 5,683,821.70 27,989.04
10/1/2034 5,655,832.66 28,072.54
11/1/2034 5,627,760.12 28,156.29
12/1/2034 5,599,603.83 28,240.29
1/1/2035 5,571,363.54 28,324.54
2/1/2035 5,543,039.00 28,409.04
3/1/2035 5,514,629.96 28,493.79
4/1/2035 5,486,136.17 28,578.80
5/1/2035 5,457,557.37 28,664.06
6/1/2035 5,428,893.31 28,749.57
7/1/2035 5,400,143.74 28,835.34
8/1/2035 5,371,308.40 28,921.37
9/1/2035 5,342,387.03 29,007.65
10/1/2035 5,313,379.38 29,094.19
11/1/2035 5,284,285.19 29,180.99
D-1-7
12/1/2035 5,255,104.20 29,268.04
1/1/2036 5,225,836.16 29,355.36
2/1/2036 5,196,480.80 29,442.94
3/1/2036 5,167,037.86 29,530.77
4/1/2036 5,137,507.09 29,618.87
5/1/2036 5,107,888.22 29,707.24
6/1/2036 5,078,180.98 29,795.86
7/1/2036 5,048,385.12 29,884.75
8/1/2036 5,018,500.37 29,973.91
9/1/2036 4,988,526.46 30,063.33
10/1/2036 4,958,463.13 30,153.02
11/1/2036 4,928,310.11 30,242.98
12/1/2036 4,898,067.13 30,333.20
1/1/2037 4,867,733.93 30,423.70
2/1/2037 4,837,310.23 30,514.46
3/1/2037 4,806,795.77 30,605.50
4/1/2037 4,776,190.27 30,696.80
5/1/2037 4,745,493.47 30,788.38
6/1/2037 4,714,705.09 30,880.23
7/1/2037 4,683,824.86 30,972.36
8/1/2037 4,652,852.50 31,064.76
9/1/2037 4,621,787.74 31,157.44
10/1/2037 4,590,630.30 31,250.39
11/1/2037 4,559,379.91 31,343.62
12/1/2037 4,528,036.29 31,437.13
1/1/2038 4,496,599.16 31,530.92
2/1/2038 4,465,068.24 31,624.98
3/1/2038 4,433,443.26 31,719.33
4/1/2038 4,401,723.93 31,813.96
5/1/2038 4,369,909.97 31,908.87
6/1/2038 4,338,001.10 32,004.07
7/1/2038 4,305,997.03 32,099.55
8/1/2038 4,273,897.48 32,195.31
9/1/2038 4,241,702.17 32,291.36
10/1/2038 4,209,410.81 32,387.69
11/1/2038 4,177,023.12 32,484.32
12/1/2038 4,144,538.80 32,581.23
1/1/2039 4,111,957.57 32,678.43
2/1/2039 4,079,279.14 32,775.92
3/1/2039 4,046,503.22 32,873.70
4/1/2039 4,013,629.52 32,971.78
D-1-8
5/1/2039 3,980,657.74 33,070.14
6/1/2039 3,947,587.60 33,168.80
7/1/2039 3,914,418.80 33,267.75
8/1/2039 3,881,151.05 33,367.00
9/1/2039 3,847,784.05 33,466.55
10/1/2039 3,814,317.50 33,566.39
11/1/2039 3,780,751.11 33,666.53
12/1/2039 3,747,084.58 33,766.97
1/1/2040 3,713,317.61 33,867.71
2/1/2040 3,679,449.90 33,968.74
3/1/2040 3,645,481.16 34,070.08
4/1/2040 3,611,411.08 34,171.73
5/1/2040 3,577,239.35 34,273.67
6/1/2040 3,542,965.68 34,375.92
7/1/2040 3,508,589.76 34,478.48
8/1/2040 3,474,111.28 34,581.34
9/1/2040 3,439,529.94 34,684.51
10/1/2040 3,404,845.43 34,787.98
11/1/2040 3,370,057.45 34,891.77
12/1/2040 3,335,165.68 34,995.86
1/1/2041 3,300,169.82 35,100.26
2/1/2041 3,265,069.56 35,204.98
3/1/2041 3,229,864.58 35,310.01
4/1/2041 3,194,554.57 35,415.35
5/1/2041 3,159,139.22 35,521.00
6/1/2041 3,123,618.22 35,626.98
7/1/2041 3,087,991.24 35,733.26
8/1/2041 3,052,257.98 35,839.87
9/1/2041 3,016,418.11 35,946.79
10/1/2041 2,980,471.32 36,054.03
11/1/2041 2,944,417.29 36,161.59
12/1/2041 2,908,255.70 36,269.47
1/1/2042 2,871,986.23 36,377.68
2/1/2042 2,835,608.55 36,486.20
3/1/2042 2,799,122.35 36,595.05
4/1/2042 2,762,527.30 36,704.23
5/1/2042 2,725,823.07 36,813.73
6/1/2042 2,689,009.34 36,923.56
7/1/2042 2,652,085.78 37,033.71
8/1/2042 2,615,052.07 37,144.20
9/1/2042 2,577,907.87 37,255.01
D-1-9
10/1/2042 2,540,652.86 37,366.16
11/1/2042 2,503,286.70 37,477.63
12/1/2042 2,465,809.07 37,589.44
1/1/2043 2,428,219.63 37,701.58
2/1/2043 2,390,518.05 37,814.06
3/1/2043 2,352,703.99 37,926.87
4/1/2043 2,314,777.12 38,040.02
5/1/2043 2,276,737.10 38,153.50
6/1/2043 2,238,583.60 38,267.33
7/1/2043 2,200,316.27 38,381.49
8/1/2043 2,161,934.78 38,496.00
9/1/2043 2,123,438.78 38,610.84
10/1/2043 2,084,827.94 38,726.03
11/1/2043 2,046,101.91 38,841.57
12/1/2043 2,007,260.34 38,957.44
1/1/2044 1,968,302.90 39,073.67
2/1/2044 1,929,229.23 39,190.24
3/1/2044 1,890,038.99 39,307.15
4/1/2044 1,850,731.84 39,424.42
5/1/2044 1,811,307.42 39,542.04
6/1/2044 1,771,765.38 39,660.00
7/1/2044 1,732,105.38 39,778.32
8/1/2044 1,692,327.06 39,896.99
9/1/2044 1,652,430.07 40,016.02
10/1/2044 1,612,414.05 40,135.40
11/1/2044 1,572,278.65 40,255.14
12/1/2044 1,532,023.51 40,375.23
1/1/2045 1,491,648.28 40,495.69
2/1/2045 1,451,152.59 40,616.50
3/1/2045 1,410,536.09 40,737.67
4/1/2045 1,369,798.42 40,859.20
5/1/2045 1,328,939.22 40,981.10
6/1/2045 1,287,958.12 41,103.36
7/1/2045 1,246,854.76 41,225.99
8/1/2045 1,205,628.77 41,348.98
9/1/2045 1,164,279.79 41,472.34
10/1/2045 1,122,807.45 41,596.06
11/1/2045 1,081,211.39 41,720.16
12/1/2045 1,039,491.23 41,844.62
1/1/2046 997,646.61 41,969.46
2/1/2046 955,677.15 42,094.67
D-1-10
3/1/2046 913,582.48 42,220.25
4/1/2046 871,362.23 42,346.21
5/1/2046 829,016.02 42,472.54
6/1/2046 786,543.48 42,599.25
7/1/2046 743,944.23 42,726.34
8/1/2046 701,217.89 42,853.80
9/1/2046 658,364.09 42,981.65
10/1/2046 615,382.44 43,109.88
11/1/2046 572,272.56 43,238.49
12/1/2046 529,034.07 43,367.49
1/1/2047 485,666.58 43,496.86
2/1/2047 442,169.72 43,626.63
3/1/2047 398,543.09 43,756.78
4/1/2047 354,786.31 43,887.32
5/1/2047 310,898.99 44,018.25
6/1/2047 266,880.74 44,149.58
7/1/2047 222,731.16 44,281.29
8/1/2047 178,449.87 44,413.39
9/1/2047 134,036.48 44,545.89
10/1/2047 89,490.59 44,678.79
11/1/2047 44,811.80 44,811.80
D-2-1
EXHIBIT D-2
SCHEDULE OF SERIES B LOAN PRINCIPAL PAYMENTS
Payment Date Outstanding
Principal
Principal
Amount Due
12/1/2017 13,056,538.34 20,262.30
1/1/2018 13,036,276.04 20,322.76
2/1/2018 13,015,953.28 20,383.38
3/1/2018 12,995,569.90 20,444.19
4/1/2018 12,975,125.71 20,505.19
5/1/2018 12,954,620.52 20,566.36
6/1/2018 12,934,054.16 20,627.71
7/1/2018 12,913,426.45 20,689.25
8/1/2018 12,892,737.20 20,750.98
9/1/2018 12,871,986.22 20,812.88
10/1/2018 12,851,173.34 20,874.98
11/1/2018 12,830,298.36 20,937.25
12/1/2018 12,809,361.11 20,999.72
1/1/2019 12,788,361.39 21,062.37
2/1/2019 12,767,299.02 21,125.20
3/1/2019 12,746,173.82 21,188.22
4/1/2019 12,724,985.60 21,251.43
5/1/2019 12,703,734.17 21,314.83
6/1/2019 12,682,419.34 21,378.43
7/1/2019 12,661,040.91 21,442.20
8/1/2019 12,639,598.71 21,506.17
9/1/2019 12,618,092.54 21,570.33
10/1/2019 12,596,522.21 21,634.68
11/1/2019 12,574,887.53 21,699.22
12/1/2019 12,553,188.31 21,763.97
1/1/2020 12,531,424.34 21,828.89
2/1/2020 12,509,595.45 21,894.01
3/1/2020 12,487,701.44 21,959.33
4/1/2020 12,465,742.11 22,024.85
5/1/2020 12,443,717.26 22,090.55
6/1/2020 12,421,626.71 22,156.46
7/1/2020 12,399,470.25 22,222.56
8/1/2020 12,377,247.69 22,288.86
9/1/2020 12,354,958.83 22,355.35
10/1/2020 12,332,603.48 22,422.04
D-2-2
11/1/2020 12,310,181.44 22,488.94
12/1/2020 12,287,692.50 22,556.02
1/1/2021 12,265,136.48 22,623.32
2/1/2021 12,242,513.16 22,690.82
3/1/2021 12,219,822.34 22,758.50
4/1/2021 12,197,063.84 22,826.40
5/1/2021 12,174,237.44 22,894.50
6/1/2021 12,151,342.94 22,962.81
7/1/2021 12,128,380.13 23,031.31
8/1/2021 12,105,348.82 23,100.02
9/1/2021 12,082,248.80 23,168.94
10/1/2021 12,059,079.86 23,238.05
11/1/2021 12,035,841.81 23,307.38
12/1/2021 12,012,534.43 23,376.92
1/1/2022 11,989,157.51 23,446.65
2/1/2022 11,965,710.86 23,516.61
3/1/2022 11,942,194.25 23,586.77
4/1/2022 11,918,607.48 23,657.13
5/1/2022 11,894,950.35 23,727.71
6/1/2022 11,871,222.64 23,798.50
7/1/2022 11,847,424.14 23,869.50
8/1/2022 11,823,554.64 23,940.70
9/1/2022 11,799,613.94 24,012.13
10/1/2022 11,775,601.81 24,083.77
11/1/2022 11,751,518.04 24,155.61
12/1/2022 11,727,362.43 24,227.68
1/1/2023 11,703,134.75 24,299.96
2/1/2023 11,678,834.79 24,372.45
3/1/2023 11,654,462.34 24,445.16
4/1/2023 11,630,017.18 24,518.10
5/1/2023 11,605,499.08 24,591.24
6/1/2023 11,580,907.84 24,664.60
7/1/2023 11,556,243.24 24,738.19
8/1/2023 11,531,505.05 24,811.99
9/1/2023 11,506,693.06 24,886.00
10/1/2023 11,481,807.06 24,960.25
11/1/2023 11,456,846.81 25,034.72
12/1/2023 11,431,812.09 25,109.40
1/1/2024 11,406,702.69 25,184.31
2/1/2024 11,381,518.38 25,259.44
3/1/2024 11,356,258.94 25,334.80
D-2-3
4/1/2024 11,330,924.14 25,410.38
5/1/2024 11,305,513.76 25,486.19
6/1/2024 11,280,027.57 25,562.23
7/1/2024 11,254,465.34 25,638.49
8/1/2024 11,228,826.85 25,714.98
9/1/2024 11,203,111.87 25,791.69
10/1/2024 11,177,320.18 25,868.63
11/1/2024 11,151,451.55 25,945.82
12/1/2024 11,125,505.73 26,023.22
1/1/2025 11,099,482.51 26,100.85
2/1/2025 11,073,381.66 26,178.72
3/1/2025 11,047,202.94 26,256.82
4/1/2025 11,020,946.12 26,335.15
5/1/2025 10,994,610.97 26,413.72
6/1/2025 10,968,197.25 26,492.52
7/1/2025 10,941,704.73 26,571.55
8/1/2025 10,915,133.18 26,650.83
9/1/2025 10,888,482.35 26,730.33
10/1/2025 10,861,752.02 26,810.08
11/1/2025 10,834,941.94 26,890.06
12/1/2025 10,808,051.88 26,970.29
1/1/2026 10,781,081.59 27,050.75
2/1/2026 10,754,030.84 27,131.45
3/1/2026 10,726,899.39 27,212.40
4/1/2026 10,699,686.99 27,293.57
5/1/2026 10,672,393.42 27,375.00
6/1/2026 10,645,018.42 27,456.67
7/1/2026 10,617,561.75 27,538.59
8/1/2026 10,590,023.16 27,620.75
9/1/2026 10,562,402.41 27,703.14
10/1/2026 10,534,699.27 27,785.79
11/1/2026 10,506,913.48 27,868.69
12/1/2026 10,479,044.79 27,951.83
1/1/2027 10,451,092.96 28,035.21
2/1/2027 10,423,057.75 28,118.85
3/1/2027 10,394,938.90 28,202.75
4/1/2027 10,366,736.15 28,286.88
5/1/2027 10,338,449.27 28,371.27
6/1/2027 10,310,078.00 28,455.91
7/1/2027 10,281,622.09 28,540.81
8/1/2027 10,253,081.28 28,625.96
D-2-4
9/1/2027 10,224,455.32 28,711.35
10/1/2027 10,195,743.97 28,797.01
11/1/2027 10,166,946.96 28,882.92
12/1/2027 10,138,064.04 28,969.08
1/1/2028 10,109,094.96 29,055.51
2/1/2028 10,080,039.45 29,142.19
3/1/2028 10,050,897.26 29,229.13
4/1/2028 10,021,668.13 29,316.33
5/1/2028 9,992,351.80 29,403.80
6/1/2028 9,962,948.00 29,491.51
7/1/2028 9,933,456.49 29,579.50
8/1/2028 9,903,876.99 29,667.75
9/1/2028 9,874,209.24 29,756.26
10/1/2028 9,844,452.98 29,845.02
11/1/2028 9,814,607.96 29,934.06
12/1/2028 9,784,673.90 30,023.37
1/1/2029 9,754,650.53 30,112.93
2/1/2029 9,724,537.60 30,202.77
3/1/2029 9,694,334.83 30,292.88
4/1/2029 9,664,041.95 30,383.25
5/1/2029 9,633,658.70 30,473.89
6/1/2029 9,603,184.81 30,564.81
7/1/2029 9,572,620.00 30,655.99
8/1/2029 9,541,964.01 30,747.45
9/1/2029 9,511,216.56 30,839.19
10/1/2029 9,480,377.37 30,931.18
11/1/2029 9,449,446.19 31,023.46
12/1/2029 9,418,422.73 31,116.02
1/1/2030 9,387,306.71 31,208.85
2/1/2030 9,356,097.86 31,301.96
3/1/2030 9,324,795.90 31,395.33
4/1/2030 9,293,400.57 31,489.00
5/1/2030 9,261,911.57 31,582.95
6/1/2030 9,230,328.62 31,677.17
7/1/2030 9,198,651.45 31,771.67
8/1/2030 9,166,879.78 31,866.45
9/1/2030 9,135,013.33 31,961.52
10/1/2030 9,103,051.81 32,056.87
11/1/2030 9,070,994.94 32,152.51
12/1/2030 9,038,842.43 32,248.43
1/1/2031 9,006,594.00 32,344.64
D-2-5
2/1/2031 8,974,249.36 32,441.14
3/1/2031 8,941,808.22 32,537.92
4/1/2031 8,909,270.30 32,634.98
5/1/2031 8,876,635.32 32,732.34
6/1/2031 8,843,902.98 32,830.00
7/1/2031 8,811,072.98 32,927.94
8/1/2031 8,778,145.04 33,026.18
9/1/2031 8,745,118.86 33,124.70
10/1/2031 8,711,994.16 33,223.53
11/1/2031 8,678,770.63 33,322.65
12/1/2031 8,645,447.98 33,422.06
1/1/2032 8,612,025.92 33,521.77
2/1/2032 8,578,504.15 33,621.77
3/1/2032 8,544,882.38 33,722.07
4/1/2032 8,511,160.31 33,822.68
5/1/2032 8,477,337.63 33,923.58
6/1/2032 8,443,414.05 34,024.79
7/1/2032 8,409,389.26 34,126.30
8/1/2032 8,375,262.96 34,228.11
9/1/2032 8,341,034.85 34,330.22
10/1/2032 8,306,704.63 34,432.64
11/1/2032 8,272,271.99 34,535.37
12/1/2032 8,237,736.62 34,638.40
1/1/2033 8,203,098.22 34,741.73
2/1/2033 8,168,356.49 34,845.38
3/1/2033 8,133,511.11 34,949.33
4/1/2033 8,098,561.78 35,053.60
5/1/2033 8,063,508.18 35,158.17
6/1/2033 8,028,350.01 35,263.07
7/1/2033 7,993,086.94 35,368.27
8/1/2033 7,957,718.67 35,473.78
9/1/2033 7,922,244.89 35,579.61
10/1/2033 7,886,665.28 35,685.76
11/1/2033 7,850,979.52 35,792.22
12/1/2033 7,815,187.30 35,899.00
1/1/2034 7,779,288.30 36,006.10
2/1/2034 7,743,282.20 36,113.52
3/1/2034 7,707,168.68 36,221.26
4/1/2034 7,670,947.42 36,329.32
5/1/2034 7,634,618.10 36,437.70
6/1/2034 7,598,180.40 36,546.41
D-2-6
7/1/2034 7,561,633.99 36,655.43
8/1/2034 7,524,978.56 36,764.79
9/1/2034 7,488,213.77 36,874.47
10/1/2034 7,451,339.30 36,984.48
11/1/2034 7,414,354.82 37,094.81
12/1/2034 7,377,260.01 37,205.48
1/1/2035 7,340,054.53 37,316.48
2/1/2035 7,302,738.05 37,427.81
3/1/2035 7,265,310.24 37,539.47
4/1/2035 7,227,770.77 37,651.46
5/1/2035 7,190,119.31 37,763.78
6/1/2035 7,152,355.53 37,876.45
7/1/2035 7,114,479.08 37,989.45
8/1/2035 7,076,489.63 38,102.78
9/1/2035 7,038,386.85 38,216.45
10/1/2035 7,000,170.40 38,330.47
11/1/2035 6,961,839.93 38,444.82
12/1/2035 6,923,395.11 38,559.52
1/1/2036 6,884,835.59 38,674.55
2/1/2036 6,846,161.04 38,789.93
3/1/2036 6,807,371.11 38,905.66
4/1/2036 6,768,465.45 39,021.73
5/1/2036 6,729,443.72 39,138.13
6/1/2036 6,690,305.59 39,254.90
7/1/2036 6,651,050.69 39,372.01
8/1/2036 6,611,678.68 39,489.47
9/1/2036 6,572,189.21 39,607.28
10/1/2036 6,532,581.93 39,725.44
11/1/2036 6,492,856.49 39,843.95
12/1/2036 6,453,012.54 39,962.83
1/1/2037 6,413,049.71 40,082.04
2/1/2037 6,372,967.67 40,201.62
3/1/2037 6,332,766.05 40,321.55
4/1/2037 6,292,444.50 40,441.85
5/1/2037 6,252,002.65 40,562.50
6/1/2037 6,211,440.15 40,683.52
7/1/2037 6,170,756.63 40,804.89
8/1/2037 6,129,951.74 40,926.62
9/1/2037 6,089,025.12 41,048.71
10/1/2037 6,047,976.41 41,171.18
11/1/2037 6,006,805.23 41,294.01
D-2-7
12/1/2037 5,965,511.22 41,417.20
1/1/2038 5,924,094.02 41,540.76
2/1/2038 5,882,553.26 41,664.70
3/1/2038 5,840,888.56 41,788.99
4/1/2038 5,799,099.57 41,913.66
5/1/2038 5,757,185.91 42,038.71
6/1/2038 5,715,147.20 42,164.12
7/1/2038 5,672,983.08 42,289.91
8/1/2038 5,630,693.17 42,416.07
9/1/2038 5,588,277.10 42,542.62
10/1/2038 5,545,734.48 42,669.54
11/1/2038 5,503,064.94 42,796.83
12/1/2038 5,460,268.11 42,924.51
1/1/2039 5,417,343.60 43,052.57
2/1/2039 5,374,291.03 43,181.01
3/1/2039 5,331,110.02 43,309.83
4/1/2039 5,287,800.19 43,439.03
5/1/2039 5,244,361.16 43,568.63
6/1/2039 5,200,792.53 43,698.61
7/1/2039 5,157,093.92 43,828.98
8/1/2039 5,113,264.94 43,959.74
9/1/2039 5,069,305.20 44,090.88
10/1/2039 5,025,214.32 44,222.42
11/1/2039 4,980,991.90 44,354.35
12/1/2039 4,936,637.55 44,486.67
1/1/2040 4,892,150.88 44,619.39
2/1/2040 4,847,531.49 44,752.51
3/1/2040 4,802,778.98 44,886.02
4/1/2040 4,757,892.96 45,019.93
5/1/2040 4,712,873.03 45,154.24
6/1/2040 4,667,718.79 45,288.95
7/1/2040 4,622,429.84 45,424.06
8/1/2040 4,577,005.78 45,559.57
9/1/2040 4,531,446.21 45,695.49
10/1/2040 4,485,750.72 45,831.82
11/1/2040 4,439,918.90 45,968.55
12/1/2040 4,393,950.35 46,105.69
1/1/2041 4,347,844.66 46,243.24
2/1/2041 4,301,601.42 46,381.20
3/1/2041 4,255,220.22 46,519.57
4/1/2041 4,208,700.65 46,658.35
D-2-8
5/1/2041 4,162,042.30 46,797.56
6/1/2041 4,115,244.74 46,937.16
7/1/2041 4,068,307.58 47,077.20
8/1/2041 4,021,230.38 47,217.64
9/1/2041 3,974,012.74 47,358.50
10/1/2041 3,926,654.24 47,499.79
11/1/2041 3,879,154.45 47,641.50
12/1/2041 3,831,512.95 47,783.63
1/1/2042 3,783,729.32 47,926.18
2/1/2042 3,735,803.14 48,069.17
3/1/2042 3,687,733.97 48,212.58
4/1/2042 3,639,521.39 48,356.40
5/1/2042 3,591,164.99 48,500.67
6/1/2042 3,542,664.32 48,645.36
7/1/2042 3,494,018.96 48,790.49
8/1/2042 3,445,228.47 48,936.04
9/1/2042 3,396,292.43 49,082.04
10/1/2042 3,347,210.39 49,228.46
11/1/2042 3,297,981.93 49,375.33
12/1/2042 3,248,606.60 49,522.63
1/1/2043 3,199,083.97 49,670.38
2/1/2043 3,149,413.59 49,818.56
3/1/2043 3,099,595.03 49,967.18
4/1/2043 3,049,627.85 50,116.25
5/1/2043 2,999,511.60 50,265.77
6/1/2043 2,949,245.83 50,415.73
7/1/2043 2,898,830.10 50,566.14
8/1/2043 2,848,263.96 50,716.99
9/1/2043 2,797,546.97 50,868.30
10/1/2043 2,746,678.67 51,020.06
11/1/2043 2,695,658.61 51,172.26
12/1/2043 2,644,486.35 51,324.93
1/1/2044 2,593,161.42 51,478.04
2/1/2044 2,541,683.38 51,631.62
3/1/2044 2,490,051.76 51,785.66
4/1/2044 2,438,266.10 51,940.15
5/1/2044 2,386,325.95 52,095.10
6/1/2044 2,334,230.85 52,250.52
7/1/2044 2,281,980.33 52,406.40
8/1/2044 2,229,573.93 52,562.75
9/1/2044 2,177,011.18 52,719.56
D-2-9
10/1/2044 2,124,291.62 52,876.84
11/1/2044 2,071,414.78 53,034.59
12/1/2044 2,018,380.19 53,192.81
1/1/2045 1,965,187.38 53,351.50
2/1/2045 1,911,835.88 53,510.66
3/1/2045 1,858,325.22 53,670.31
4/1/2045 1,804,654.91 53,830.43
5/1/2045 1,750,824.48 53,991.02
6/1/2045 1,696,833.46 54,152.09
7/1/2045 1,642,681.37 54,313.64
8/1/2045 1,588,367.73 54,475.68
9/1/2045 1,533,892.05 54,638.19
10/1/2045 1,479,253.86 54,801.20
11/1/2045 1,424,452.66 54,964.69
12/1/2045 1,369,487.97 55,128.67
1/1/2046 1,314,359.30 55,293.14
2/1/2046 1,259,066.16 55,458.09
3/1/2046 1,203,608.07 55,623.54
4/1/2046 1,147,984.53 55,789.49
5/1/2046 1,092,195.04 55,955.93
6/1/2046 1,036,239.11 56,122.86
7/1/2046 980,116.25 56,290.29
8/1/2046 923,825.96 56,458.23
9/1/2046 867,367.73 56,626.66
10/1/2046 810,741.07 56,795.60
11/1/2046 753,945.47 56,965.04
12/1/2046 696,980.43 57,134.98
1/1/2047 639,845.45 57,305.44
2/1/2047 582,540.01 57,476.40
3/1/2047 525,063.61 57,647.87
4/1/2047 467,415.74 57,819.86
5/1/2047 409,595.88 57,992.35
6/1/2047 351,603.53 58,165.36
7/1/2047 293,438.17 58,338.88
8/1/2047 235,099.29 58,512.94
9/1/2047 176,586.35 58,687.50
10/1/2047 117,898.85 58,862.58
11/1/2047 59,036.27 59,036.27
E-1
EXHIBIT E
ASSIGNMENT LETTER
[Date]
St. Augustine’s School of San Diego
San Diego, California
California Enterprise Development Authority
Sacramento, California
Re: Master Loan Agreement, dated as of October 1, 2015, by and among MUFG
Union Bank, N.A. (the “Lender”), California Enterprise Development Authority
(the “Issuer”) and St. Augustine’s School of San Diego (the “Borrower”)
Ladies and Gentlemen:
The undersigned, a duly authorized representative of the Lender hereby advises you that
pursuant to Section 10.01 of the Master Loan Agreement, dated as of October 1, 2015, by and
among the Lender, the Issuer and the Borrower (the “Loan Agreement”), a 100% participation
interest in the Loan (as defined in the Loan Agreement) made pursuant the Loan Agreement in
the aggregate principal amount of $__,000,000 (the “Loan”) has been assigned on this date by
the Lender to _____________, a wholly-owned subsidiary of the Lender, and an Affiliate (as
defined in the Loan Agreement). The Lender will act as servicer for the Loan.
MUFG UNION BANK, N.A.
By:
[Name, Title]
ACKNOWLEDGED:
ST. AUGUSTINE’S SCHOOL OF SAN DIEGO,
a California nonprofit religious corporation
By
[Name, Title]
CALIFORNIA ENTERPRISE
DEVELOPMENT AUTHORITY
By
Chair
F- 1
EXHIBIT F
FORM OF PROJECT FUND DRAW REQUEST
PROJECT FUND DRAW REQUEST NO. [__] PURSUANT TO
MASTER LOAN AGREEMENT
by and among
MUFG UNION BANK, N.A.,
Lender
and
CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY,
the Issuer
and
ST. AUGUSTINE’S SCHOOL OF SAN DIEGO,
as the Borrower
Dated as of __________, 20__
THIS PROJECT FUND DRAW REQUEST (this “Draw Request”) is made pursuant to
the Section 3.04 of the Loan Agreement identified above (the “Loan Agreement”). Defined
terms used but not otherwise defined herein shall have the meaning set forth in the Loan
Agreement.
Section 1. The Borrower hereby requests a draw from the Series B Loan in the
amount of $_________, all subject to the provisions of the Loan Agreement for the Project
Costs.
Section 2. The undersigned authorized representative, on behalf of the Borrower,
hereby identifies the Project Costs, as set forth in Schedule I hereto, pertaining to this Draw
Request. Attached hereto are invoice(s), contract(s) and, if applicable, evidence of payment
relating to such Project Costs.
Section 3. The Borrower hereby certifies that obligations in amounts stated in this
Draw Request are a proper charge against the Project Fund.
Section 4. The Borrower represents, covenants and warrants that (a) there has not
been any material adverse change in its condition, business, operations, performance, properties
or prospects since the date of the Loan Agreement, (b) all of its representations and warranties
contained in the Loan Agreement were true and accurate as of the date made, remain true and
accurate as of the date of this certificate and are hereby reaffirmed; and (c) no event has occurred
F-2
and is continuing or would result from the loan of Loan Proceeds pursuant to this Draw Request
which constitutes a Default, an Event of Default or a Determination of Taxability, and no
condition exists which, after notice or lapse of time, or both, would constitute an Event of
Default or an Event of Taxability.
Section 5. The Borrower hereby certifies that the Loan Proceeds disbursed pursuant
to each prior Draw Request were disbursed in accordance with the terms of each such prior Draw
Request.
Section 6. The Borrower (to its best knowledge at the time of this Draw Request)
hereby certifies that:
(a) all work performed is in substantial accordance with the Plans and
Specifications;
(b) all licenses and permits required by any “Governmental Authority” (as
hereinafter defined) for the Improvements as then completed have been obtained and will
be exhibited to the Lender upon request. “Governmental Authority” shall mean (i) any
governmental municipality or political subdivision thereof, (ii) any governmental or
quasi–governmental agency, authority, board, bureau, commission, department
instrumentality or public body, or (iii) any court, administrative tribunal or public utility;
(c) the Improvements as then completed do not violate, and, if further
completed in accordance with the Plans and Specifications, will not violate, any
applicable law, ordinance, rule or regulation; and
(d) the remaining undisbursed proceeds of the Loan, together with any funds
collected by or otherwise available to the Borrower, are or will be sufficient to pay for the
completion of the Improvements.
Section 7. The Borrower hereby certifies that all conditions precedent to the
disbursement of Loan Proceeds pursuant to the Project Fund Disbursement Agreement have been
satisfied.
Submitted on __________, 20__ by:
BORROWER:
ST. AUGUSTINE’S SCHOOL
OF SAN DIEGO
By [Name, Title]
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Approved as of ________, 20__ by:
LENDER:
MUFG UNION BANK, N.A.
By [Name, Title]
F-4
SCHEDULE I
TO DRAW REQUEST NO. ____
PROJECT COSTS
To Amount Purpose
G-1
EXHIBIT G
AGGREGATE PRINCIPAL AMOUNT OF SERIES B LOAN OUTSTANDING
Date Draw Request
No. __
Amount ($) of Draw
(Request)
Aggregate Amount of
Loan Outstanding
TOTAL
H-1
EXHIBIT H
FORM OF REPORTING CERTIFICATE
TO: MUFG Union Bank, N.A.
RE: Master Loan Agreement, dated as of October 1, 2015, by and among MUFG
Union Bank, N.A., California Enterprise Development Authority and St.
Augustine’s School of San Diego (the “Loan Agreement”)
DATE: [Date]
The undersigned Authorized Borrower Representative hereby certifies as of the date
hereof that [he/she] is the [_____________________] of the Borrower, and that, as such,
[he/she] is authorized to execute and deliver this Certificate to the Lender on the behalf of the
Borrower, and that:
1. Borrower has delivered the year-end reviewed financial statements required by
Section 7.05(a) of the Loan Agreement for the fiscal year ended as of the above date.
2. A review of the activities of the Borrower during such fiscal year has been made
under the supervision of the undersigned with a view to determining whether during such fiscal
year the Borrower performed and observed all its obligations under the Loan Agreement, and
[select one:]
[to the best knowledge of the undersigned, during such fiscal year the Borrower
performed and observed each covenant and condition of the Loan Agreement applicable to it,
and no Default has occurred and is continuing.]
--or—
[to the best knowledge of the undersigned, the following covenants or conditions have
not been performed or observed and the following is a list of each such Default and its nature and
status:]
3. The financial covenant analyses and information set forth on Schedule A attached
hereto are true and accurate on and as of the date of this Certificate.
4. To the best knowledge of the undersigned, no Event of Taxability has occurred.
H-2
Defined terms used in this Certificate shall have the meaning set forth in the Loan
Agreement.
ST. AUGUSTINE’S SCHOOL
OF SAN DIEGO
By
Authorized Officer
Schedule A-1
Schedule A
Financial Statement Date: [________, ____] (“Statement Date”)
I. Section 7.16(a) – Net Unrestricted Cash and Investments.
Net Unrestricted Cash and Investments of the
Borrower
$_______________
Minimum Net Unrestricted Cash and Investments Required By Loan Agreement: $3,000,000.
Borrower in compliance with Section 7.16(a)? Yes ____ No _____
II. Section 7.16(b) – Debt Service Coverage Ratio.
A. Operating Profits
$_______________
B. + Depreciation
($______________)
C. + Interest Expense
($______________)
D. A + B + C
$______________
E. Current portion of long term debt
$______________
F. + Interest Expense
$_______________
G. E + F $_______________
L. Debt Service Coverage Ratio (D/G)
$_______________
Minimum Debt Service Coverage Ratio Required By Loan Agreement: 1.15:1.00
Borrower in compliance with Section 7.16(b)? Yes ____ No _____
I-1
EXHIBIT I
FORM OF CERTIFICATE OF COMPLETION
The undersigned duly authorized officer of the St. Augustine’s School of San Diego, a
California nonprofit religious corporation (“Borrower”) hereby certifies with respect to the
Master Loan Agreement, dated as of October 1, 2015 (the “Loan Agreement”), by and among the
Borrower, MUFG Union Bank, N.A. (“Lender”) and the California Enterprise Development
Authority (the “Issuer”), that:
1. The Project (as defined in the Loan Agreement) has been constructed and
equipped in accordance with the Borrower’s plans and specifications and has been completed by
the Borrower.
2. Borrower has obtained, or has arranged to obtain, from one or more reputable
insurance companies qualified to do business in the State (as defined in the Agreement)
insurance with respect to all risks required to be covered thereby pursuant to Section 7.04 of the
Loan Agreement.
3. All of the representations and warranties of the Borrower contained in the Loan
Agreement are true and correct as of the date hereof and no Default or Event of Default has
occurred thereunder. The Borrower has fully and satisfactorily performed all of its covenants and
obligations to date required under the Loan Agreement.
4. Borrower has reviewed the provisions of the Tax Regulatory Agreement (as
defined in the Loan Agreement), and none of the proceeds of the Borrower Loans (as defined in
the Loan Agreement) have been expended in violation of the provisions of the Tax Regulatory
Agreement.
5. Borrower understands that Lender and the Issuer are relying on the certifications
herein in connection with the completion of the Project and the expenditure of the proceeds of
the Borrower Loans.
Dated: _________ __, 20__.
ST. AUGUSTINE’S SCHOOL OF SAN DIEGO By Authorized Officer
Recommended